One Year into the COVID-19 Pandemic: Trends in California’s Home Prices
By Joshua Baum, Founder & CEO
Nearly a year into the COVID-19 Pandemic, it is safe to say that housing markets throughout the United States have changed dramatically. Already an expensive state to live in due to a limited supply of housing to rent or own, California’s owner-occupied housing stock has become even more expensive over the course of the pandemic due to millennials seeking homeownership opportunities, low interest rates, and the proliferation of remote work, which has made it easier for workers to live in more suburban and even rural parts of the state.
According to Zillow, home values statewide increased by 10.9% from February, 2020 to February, 2021 to reach $635,000. This is an acceleration from the 3.3% that home values increased during the same time period the year before.
Home value increases have varied throughout the state. The MSAs with the biggest increase were the Truckee (19.4%), Stockton (14.8%), and San Diego (14.2%) metros. The MSAs with the slowest increase were the Crescent City (0.8%), San Francisco-Oakland (5.4%), and Red Bluff (5.6%) metros.
The most expensive and cheapest metro home values in the state were largely as expected. The most expensive were the San Jose ($1.3 million), San Francisco-Oakland ($1.2 million), and the Santa Cruz ($955,000) metros. The cheapest metros were the Susanville ($183,000), Red Bluff ($255,000), and El Centro ($258,000) metros.
Moving forward, Hilgard Analytics predicts that these trends likely will reverse themselves as more employers call back their employees to the office. In addition, the trend of low interest rates and low inventory, that has led to most sales involving multiple offers, shouldn’t be expected to last forever. The Federal Reserve is expected to eventually raise interest rates to ward off inflation, and once the economy returns to normal, inventory should go up as homeowners attempt to try to take advantage of the “seller’s market”.
About Hilgard Analytics
Hilgard Analytics is a socially conscious real estate and economic development research consultancy offering services in residential and commercial real estate, sectoral employment, economic and workforce development, demographic research, and geographic information systems analysis. Email us at Hilgard.Analytics@gmail.com for a quote today!
About the Author
Joshua Baum is a highly respected urban planner with extensive experience analyzing residential and commercial real estate markets, researching climate action strategies, developing economic and workforce development plans, and organizing successful political campaigns. He has made appearances on KPCC (SCPR) 89.3 FM and has been published by Planetizen, the Abundant Housing LA Blog, the Daily Bruin, and Ha’am Jewish Newsmagazine.
Before founding Hilgard Analytics, Joshua worked as a Research Associate at one of California’s most prestigious economic research consulting firms. While attending graduate school, he participated in multiple fellowships such as the Summer Associate program at the Southern California Association of Governments and the Graduate Student Researcher program at the UCLA Lewis Center for Regional Policy Studies. Additionally, Joshua worked on several local political campaigns in Orange County during the 2016 election cycle.
Joshua received a BA in Political Science from UCLA and a M.A. in Urban Planning from the UCLA Luskin School of Public Affairs. He can be followed on Twitter @JoshuaBaum93.
