California Home transaction volume and home prices both rose more than 20 percent in January, the last Time both figures rose more than 20 percent at the same time was 17 years ago.
The California Association of Realtors released its latest data on home transaction volume and home prices, showing that at the end of January, California had 484,730 home transactions over the past 12 months, an increase of 22.5 percent, and the third consecutive year that home transaction volume has increased by more than 20 percent. In addition, California’s median home price rose to $699,890 in January, up 21.7 percent from 12 months ago, breaking the record held in February 2014. And the last time both figures increased by more than 20 percent at the same time was in August 2003.
The report says the California real estate market is hot due to three popular factors: low mortgage rates, buyers looking for homes with more living space, and a scarcity of homes on the market. At the same time, buyers’ fear of missing out has triggered bidding wars that have pushed up prices.
Data show that since 1990, California home transactions exceeded 20 percent of the previous year in 9 percent of the months, and home prices rose more than 20 percent of the previous year in 11 percent of the months, but the number of transactions and home prices increased by more than 20 percent at the same time only five times, and they were concentrated between 2002 and 2003.
Jordan Levine, chief economist for the California Association of Realtors, said, “The housing market will continue to boom as the number of new vaccinations continues to increase, another round of bailouts is on the way, and mortgage rates are now the lowest they have ever been. However, we believe that the current strong rate of housing market growth will begin to decelerate in the second half of this year as the housing shortage intensifies.”
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