Last Updated on September 27, 2024 by The HD Post Staff
CALIFORNIA – The California Association of Realtors (CAR) released a new report, September 25, forecasting the median price of homes in California to go up to $909,400 in 2025.
The report says a persistent housing shortage and a competitive housing market will continue to put upward pressure on home prices next year.
However, CAR president Melanie Barker offers a more optimistic outlook for 2025.
“An increase in homes for sale, along with lower borrowing costs, is expected to entice more buyers and sellers to enter the market in 2025,” said Barker.
This trend may gain further momentum as there’s speculation that the Federal Reserve will make another cut to interest rates in November after an initial cut, last week, of half a point.
Home sales to reach 304,400 units
The report also forecasts an increase in existing single-family home sales of 10.5% next year to reach 304,400 units. This is up from the projected 2024 sales figure of 275,400.
The anticipated growth stems from CAR’s expectation that housing supply conditions will improve next year.
“Homeowners who have delayed moving and investors who have been waiting for a market bounce-back will put their properties up on the market as they see the rising trend in home prices as an opportunity to sell,” said the news release.
CAR says supply in 2025 will remain below the norm by historical standards. However, active listings will increase slightly above 10% as market conditions and lending environment continue to improve.
16% of households can afford median priced home
CAR reported in April, the statewide median home price exceeded $900,000 for the first time ever, setting a new record-high.
Given this rising price trend, CAR expects housing affordability to remain at 16% next year. This means 16% of households will be able to afford a median priced home of $909,400 in 2025.
CAR notes that in 2018, 28% of households could afford a median priced home of $569,500.
Photo credit: California Association of RealtorsTo read the full report visit https://www.car.org/aboutus/mediacenter/newsreleases/2024-News-Releases/2025forecast
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