California home prices soar, posing challenges for homebuyers

Homeownership dreams in Golden State cities like Salinas and the Anaheim-Santa Ana-Irvine area are slipping further away for many, as newly released data from the National Association of Realtors (NAR) shows significant spikes in single-family home prices, notable in a nationwide trend. Salinas leads with a 17.1% rise to a median of $993,900, while Anaheim-Santa Ana-Irvine isn’t far behind at 14.8%, reaching $1,299,500. Contrastingly, Dayton, Ohio, boasts the largest increase at 19.9% but with a far more accessible median price of $240,700. This surge aligns with a broader pattern where over 85% of American cities have seen home prices increase, with 34 metros witnessing double-digit growth.

NAR Chief Economist Lawrence Yun painted a stark picture for recent home buyers, stating, “Homeowners have benefited from housing wealth accumulation. However, many homebuyers have been shocked at high housing costs, with a typical monthly mortgage payment rising from $1,000 three years ago to more than $2,000 last year,” Yun said. This burden, according to Yun, is not reflected in the official consumer price index inflation calculations, compounding the ‘sense of dissatisfaction about the economy.’

The most expensive U.S. markets are predominantly in California, with eight of the top ten metros, including San Jose, Anaheim, San Francisco, Salinas, San Diego, Oxnard-Thousand Oaks-Ventura, San Luis Obispo, and Los Angeles. Yet for first-time buyers, the situation is dire, as only 32% of all transactions last year were by this demographic, marking the fourth lowest share in over four decades as chronicled by NAR. Creditnews Research’s in-depth analysis further underscores the challenge, pointing out the remarkably low affordability in Californian cities like Riverside and San Bernardino, locking out burgeoning buyers.

Conversely, the rankings highlight metro areas like Pittsburgh, Austin, San Antonio, Birmingham-Hoover, and Jacksonville as more conducive for first-time home purchases. Pittsburgh, in particular, boasts the lowest starter home prices at $107,912, accounting for just 14% of the median monthly household income. “California is one of those states where many people are moving out to other states, like Texas and Idaho, and that trend has not stopped,” said Jules Brenner, founder of Industrial Succession Group (ISG), which has been focusing on acquiring small manufacturing companies in Southern California.

As reported by ktla.com, californialistings.com, zububrothers.com, pressenterprise.com, and thefabricator.com.