California’s housing market cooled slightly in May, bringing somewhat of a relief to buyers, but in this market, any cooldown can be appreciated. Median California home prices did hit another record high in May, reaching $818,260, but the state’s home sales dropped 2.7% for the first time since February. And the uptick in median home prices is meager compared to last month’s increase of 7%. Still, the median price for a single-family home in California was $588,070 in May 2020, says Mercury News. One Los Angeles real estate broker says buyers have reached their limits after submitting countless bids and receiving rejection after rejection.
“My clients are exhausted. They would still love to buy a house, but they’re not interested in the bidding wars,” said Kelli Miller, a broker in San Diego. “I’m still seeing multiple offers, but it’s not the frenzy that it was before.”
Miller said the downgrade was more noticeable among homes priced below $1 million, noting that it was those homes that would have received a dozen offers or more just a few months ago. They are now receiving “only” five or six offers. Much of that has to do with inflated asking prices, which have been propelled upward by a trifecta of record-low supply, increased demand and rock-bottom mortgage rates.
“Most families just are not interested in paying such a marked-up premium,” she said.
A May report from the California Association of Realtors noted that the sales of ultraluxury properties played a significant role in the month’s record-breaking median home price, referring to “robust demand of higher-priced properties” and adding that the market share of $1 million home sales in California has increased more than 200% from May 2020.
“More million dollar properties were sold in the past couple of months than homes priced below $500,000,” the report’s authors added.
California, which remains mired in an affordable housing crisis, saw its population decline last year for the first time in more than a century. And the demographics of its cities and suburbs remain in flux as many residents, particularly young families with children, leave its urban centers for more affordable homes in farther-flung spots.
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