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California Home Prices Break New Record

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California Home Prices Break New Record

California Home Prices Break New Record

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The state of California continues to set and break new depressive records, the most recent one concerning housing. Now, if you want an average home, you’ll need to have at least $900,000, a first for the state since its creation. 

That’s not the worst part. Even if, by some miracle, one can gather that much money while trying to survive the state’s high cost of living, there is a housing shortage, meaning not everyone will get houses regardless of how much they have in the bank. 

Homes in California Now Cost an Arm and a Leg

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New data released by the California Association of Realtors claims an average home in the Golden State now costs exactly $904,210. This means home prices have risen by about 11.4% compared to prices in 2023. 

How Mortgage Rates Are Affecting Homebuyers

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Prices of homes in California are steadily increasing, but people continue to struggle to purchase them, which directly contrasts with what many analysts predicted. According to housing experts, California’s high mortgage rates should have deterred people from buying homes, but that has yet to happen, even though the rates are now at 7%. One good news is that those rates fell from last year’s 8%, but the change is hardly enough for some. 

Adaptation Is Happening

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According to Melanie Barker, president of the California Association of Realtors, the new data proves that those selling homes have adapted to the state’s new reality of real estate. Barker believes it shows how resilient residents are, as they have been able to adjust to the higher interest rates. 

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Californians Are Seemingly Built Different

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America has some economic concerns that have forced many of its citizens to become more conscious about how they spend money, but Californians don’t seem to care. The new report has also shown that people buying homes in the state are doing so regardless of the country’s economic status when the expected behavior was for them to act more cautiously by slowing down home purchases. 

There’s a House Shortage Crisis in California

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Aside from high interest rates and expensive houses, Californians also have to deal with a shortage of homes in most parts of the state. This is happening despite heightened demand, which has caused house prices to go up even more over the last couple of years. 

House Prices Skyrocketed in 2024

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The prices of homes in California have been increasing over the past couple of years, but none of those hikes has beaten this year’s. It is just the year’s second quarter, and home prices have risen by almost 6%.

POLL—Should the Government Increase Taxes on the Wealthy To Reduce Economic Inequality? 

Million-Dollar Homes Are Influencing Median Home Prices

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The purchases of homes that cost a million and above have increased by 40% since April of 2024, influencing median home prices. Even those areas of the state that boasted affordable homes now have properties listed for $1 million and above. 

Average Homes Have Seen Price Increases Throughout the State

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Some cities, like San Francisco, saw huge increases in home prices in just one year, but median home prices have also increased in many areas in California. One area with the current highest housing inflation is Tustin, with home values up by 11.7%. 

More Home Purchases in San Francisco

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San Francisco has been dealing with its fair share of problems, but they have yet to deter homebuyers. Because of these issues, a departure from the Bay Area was expected, but instead, people have simply been buying more houses despite the 15.5% increase in prices. 

How Much You Need To Make Yearly To Buy a House in California

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Locals have realized that it will take a lot to afford a home in California. In 2023, a report revealed that home affordability hit an all-time low not seen in over a decade. Residents are now required to make at least $222,800 annually to afford a home in the state.

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Who Are Those Buying Homes Then?

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As it stands, only about 15% of California residents can afford to purchase an average home. According to Jordan G. Levine, the chief economist at the California Association of Realtors, only those at the higher end of the spectrum have been able to make purchases. Meanwhile, the average person has little to no options. 

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