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California Housing Market Ends 2020 on a High Note

Despite a myriad of obstacles stemming from two pandemic-induced lockdowns and a problematic economy that forced many residents and businesses to leave the state, California's housing market closed 2020 with a vibrant sales rate and a fifth record-high median price in December, according to new data published by the California Association of Realtors (CAR).

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 509,750 units in December, up 28% from the 398,370 sales at the end of 2019. This marked both the fifth consecutive and the largest yearly gain since May 2009. On a monthly measurement, sales were up 0.2% from November’s level of 508,820.

For the year as a whole, annual home sales rose to a preliminary 411,870 closed escrow sales in California, up 3.5% from 2019's pace of 397,960.

After dipping below $700,000 in November, California's median home price bounced back above that benchmark and set another record high in December with a 2.7% uptick to $717,930; the year-over-year increase was 16.8% from $614,880 in December 2019. All but one of the 51 counties tracked by CAR reported a year-over-year price gain, with 48 of them increasing by 10% or more.

The statewide median home price for the entire year was $659,380, an increase of 11.3% from a revised $592,230 in 2019.

"It's a testament to the strength of the market that even after the pandemic effectively shut down the spring home-buying season in 2020, the market still was able to recover the substantial sales lost in the first half of the year and even top 2019's levels," said CAR President Dave Walsh, vice president and manager of the Compass San Jose office. "With mortgage rates expected to stay near the lowest in history, demand for homeownership will continue to be strong, so home sales should remain elevated into the first half of 2021, as motivated buyers take advantage of the increased purchasing power."

However, inventory continued to be a persistent problem in the state. CAR's Unsold Inventory Index dropped to 1.3 months in December, matching the record-low from the spring of 2004. Active listings fell 47.1% from last year and continued to drop more than 40% on a year-over-year basis for the seventh straight month. On a month-to-month basis, for-sale properties dropped 18.6% in December.

About Author: Phil Hall

Phil Hall is a former United Nations-based reporter for Fairchild Broadcast News, the author of nine books, the host of the award-winning SoundCloud podcast "The Online Movie Show," co-host of the award-winning WAPJ-FM talk show "Nutmeg Chatter" and a writer with credits in The New York Times, New York Daily News, Hartford Courant, Wired, The Hill's Congress Blog and Profit Confidential. His real estate finance writing has been published in the ABA Banking Journal, Secondary Marketing Executive, Servicing Management, MortgageOrb, Progress in Lending, National Mortgage Professional, Mortgage Professional America, Canadian Mortgage Professional, Mortgage Professional News, Mortgage Broker News and HousingWire.
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