California Sees Surge in Homeowners Trying to Sell Their Houses

The number of homes listed for sale in California is on the rise and last month saw the largest jump in more than a year amid heightening home prices in the state, according to data from the California Association of Realtors (CAR).

CAR pointed out that active listings shot up based on monthly comparisons to last year for the second consecutive month, while new active listings also increased by double digits as the hopping spring season for home sales gets underway. The median home price in California is at its highest level in seven months, jumping nearly 8 percent to about $855,000 in March compared to the same time a year ago. From February, prices were up 6 percent.

“It’s a great time to sell a home in California,” Jordan Levine, CAR’s chief economist, told Newsweek. “About half the homes are now selling above list price once again and prices themselves are rising.”

Sellers are also seeing their homes spend less time on the market, the data showed. It took about 19 days to sell a single-family home last month, compared to 24 days a year ago.

But sales were down on a monthly basis by about 8 percent and from a year ago declined more than 4 percent. Levine said this was partly due to elevated mortgage rates that are keeping sellers locked into their low home loans, which in turn has depressed the supply of available homes.

“That has caused inventory to really dry up,” he said. “We have fewer homes available for sale on the market now than we did in the spring of 2020, when the economy was totally locked down.”

This lack of supply is also why prices for homes in the state are high, he said, as competition for available homes has escalated.

Mortgage rates have ticked up to about 7 percent in recent weeks, adding to the affordability challenge for homebuyers. On Wednesday, the Mortgage News Daily’s tracker showed that rates had ticked down to 7.41 percent after going up to 7.5 percent the previous day in what was the highest level since November.

Levine told Newsweek that in California, CAR’s affordability index shows that about 85 percent of residents in the state can longer afford a median-priced home.

“They’re just not as many folks able to take advantage of all of those benefits of homeownership,” he told Newsweek.

Levine suggested that the strong economy in California is allowing some to be able to compete for the few homes available in the market.

“We still have a really strong economy and unemployment is still very low and lots of high-income jobs being created and so that keeps pressure on supply, just because we’re so inventory-constrained,” he said. “That being said though, with so many high- income earners buying primary residences and pushing up the price of housing, it means that fewer and fewer folks are able to afford the medium-priced home.”

He added: “You can’t overstate the importance of this inventory shortage because again, even with rates that are at 7 1/2 percent, we still have more demand than supply, which is again why those prices are still going up.”