The California real estate market in 2021 largely reflected national trends, with house prices rising double-digit in the cheaper, more remote suburbs and smaller metropolitan areas like Riverside and Sacramento. In urban markets like San Francisco, the increases were more modest – at least until 2021.
In terms of overall home prices, they far exceeded the national median price. In October, the median single-family home sales price in California was $ 798,440, up 12.3 percent from the previous year, according to information from the California Department of the Treasury – more than double the national median sales price of $ 353,900 reported in November by the State Brokers’ Association .
Jeff Tucker, a senior economist at Zillow, said the Bay Area housing market was one of the coolest in the state in 2021, with property values up sharply but lower than national values. According to Zillow’s calculations, the city of San Francisco experienced an increase in the “typical” home value of 9.3 percent to 1.53 million US dollars from November 2020 to November 2021. compared to a nationwide increase of 20 percent.
“But it’s like a fractal,” he said. “You zoom in and the pattern is confirmed again,” with the national trend towards more affordable peripheral areas showing the sharpest price increase.
For example, the East Bay, which includes Berkeley, Oakland and the surrounding suburbs, saw prices rise more sharply. “Oakland has been the fastest growing market,” said Daryl Fairweather, Redfin chief economist. “Everyone left town and crossed the bridge.”
The median sales price of a single-family home in Alameda County, which includes Oakland and Berkeley, was $ 1.3 million in November 2021 – up 24 percent from $ 1.05 million in November 2020, according to data from the California Association of Realtors. By comparison, the median sales price for a single family home in San Francisco was $ 1.9 million, up 12 percent from $ 1.67 million last year.
“It’s been crazy all year,” said Daniel Stea, a broker and attorney who owns Stea Realty Group and works in Oakland and Berkeley. That is, with the exception of a brief slowdown in June, he said as the fatigue of the bidding war set in and some buyers may have left town after vaccination. Later in the summer, however, demand spiked, he added, and ready-to-move homes with home offices and backyards often received a dozen or more offers.
Sacramento has been one of the most sought-after destinations for buyers looking for larger homes at relatively affordable prices. According to Zillow’s estimate, the “typical” value of a single-family home there was US $ 472,000 in 2021 – an increase of 22.3 percent compared to 2020, but still well below the national average. “The area has newer and bigger homes than its coastal neighbor to the west,” Tucker said of San Francisco. “This is a good example of the trend in many parts of the country.”
Los Angeles also saw strong price growth. The median is in November The retail price of a single family home was $ 810,000, according to Redfin, up from $ 730,000 last year – an 11 percent increase that is a mix of larger price increases in cheaper areas and smaller price increases in already expensive places like Santa. reflected Monica, said Ms. Fairweather.
Still, the luxury market soared in affluent enclaves like Montecito near Santa Barbara, which made headlines in 2020 when Prince Harry and Meghan Markle, the Duke and Duchess of Sussex, bought a home there for $ 19.9 million. It continued to attract wealthy shoppers in 2021, and the median sales price rose 43 percent year over year to $ 6.46 million, said Martha J. Mosier, president of Berkshire Hathaway HomeServices California Properties.
Your explanation? “More and more executives no longer have to stay in LA or San Francisco.”
The inventory remains low in most states, with active listings down more than 30 percent, said Danielle Hale, chief economist at Realtor.com. In San Francisco and Los Angeles, listings rose slightly year over year, she said, “but since buyers are quite active, these homes fill up quickly.”
So what’s next for California in 2022?
“Many of these California markets will see home prices rise half as fast as they will in 2021,” said Hale. “That should be a relief for buyers.”
However, she and others warned that due to the slow pace of construction in much of the state, demand for home rentals is likely to outperform supply for the foreseeable future.
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