California Housing Market Forecast for 2020

Despite how the national economy is faring, the prices of California homes has increasingly increased year after year.

The median selling home price of $615,000 is up over 10% from December last year. Townhouses and condominium prices have moderated, in spite of having a strong sales growth period. The fact that listed prices are actually less than the selling prices means potential for bidding wars in the Spring and/or higher listing prices.

Interest rates are quite low, which draws people’s attention, especially homes over $1 million. In general, buyers are gravitating towards either luxury homes or the complete opposite direction of the condo market. This is because of a number of factors, most notably the lack of availability and the too-high price tags of single-family homes.

The areas which are seeing the majority of growth are San Francisco and Los Angeles metro areas. They have risen at approximately the same rate as the entirety of Southern California, which is approximately 15%.

Bottom line is that people are attracted to the low-interest rates, but the uncertainty of the future is keeping many of them from pulling the proverbial trigger. Many industries are losing potential service workers and teachers because these first-time buyers are choosing instead to move out of state. In addition, nearly a third of people planning on repurchasing a home said they are thinking of doing so outside of California.

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