California Housing Market Trends and Forecast for 2024

The California housing market appears to be leaning towards a balanced scenario. The surge in sales and the increase in new active listings suggest a market that is responsive to changes in interest rates. While the median home price saw a decline, it is attributed to seasonal factors, and with mortgage rates softening since mid-October, there is an expectation of continued upward momentum in home prices in the early part of 2024.

The median number of days it took to sell a California single-family home in January was 32 days, indicating a relatively brisk pace. The statewide sales-price-to-list-price ratio was 96.5 percent in January 2023, suggesting a market where sellers have some negotiation power.

California Housing Market Trends in 2024

How is the California Housing Market Doing Currently?

The latest California Housing Market Report for January 2024 reveals a dynamic real estate landscape marked by notable changes in home sales and prices. According to the California Association of Realtors (C.A.R.), existing, single-family home sales experienced a significant surge, totaling 256,160 at a seasonally adjusted annualized rate. This represents a substantial 14.4 percent increase from December’s figures and a notable 5.9 percent rise compared to January 2023.

Despite a 3.8 percent decline in the statewide median home price from December, reaching $788,940 in January, there is a noteworthy 5.0 percent increase compared to the same month in 2023. The decline in median price is attributed to seasonal factors, with January marking the first time in ten months that the median price dropped below the $800,000 benchmark.

Condo/Townhomes in California posted a median sold price of $630,000, showcasing a modest month-to-month decline of -0.8%. However, the year-over-year figures paint a more optimistic picture, with an 8.6% increase. Despite a -7.8% month-to-month drop in sales, the year-over-year data shows a 14.2% growth, suggesting sustained interest in this segment.

How Competitive is the California Housing Market?

California’s housing market has shown resilience, rebounding in January to the highest level in six months. The surge in sales is attributed to a sharp pullback in mortgage rates at the end of 2023. The January sales pace increased by 14.4 percent from December, marking the first year-over-year sales gain in 31 months. However, the sales pace remains below the 300,000-unit threshold for the 16th straight month, indicating a cautiously optimistic market.

At the regional level, all major regions experienced a rise in sales on a year-over-year basis, with the Central Valley region leading with a remarkable 12.5 percent increase. Southern California also registered an increase of 2.2 percent, albeit at a more moderate pace. However, fourteen out of the 52 counties tracked by C.A.R. reported a sales decline from a year ago, emphasizing the varied performance across the state.

Are There Enough Homes for Sale in California to Meet Buyer Demand?

The increase in new active listings for the first time in 19 months is seen as a positive development for the California housing market. However, there are concerns that potential home sellers might pause due to recent increases in mortgage rates, waiting for a more favorable lending environment. C.A.R. Senior Vice President and Chief Economist Jordan Levine noted that rates are expected to decline later in the year, potentially improving inventory throughout 2024.

Unsold inventory statewide increased by 28 percent on a month-over-month basis but declined from January 2023 by -8.6 percent. The Unsold Inventory Index (UII) dropped from 2.5 months in December to 3.2 months in January, indicating a slight tightening of the market. Active listings at the state level dipped for the 10th straight month on a year-over-year basis, with Contra Costa experiencing the most significant decline at -36.0 percent.

What is the Future Market Outlook for California?

The overall outlook for California’s housing market appears positive, with C.A.R. President Melanie Barker expressing optimism about the positive sales growth in January. Despite potential ups and downs in the coming months, Barker anticipates a more favorable lending environment in 2024, translating into increased pent-up demand translating into sales.

C.A.R. Senior Vice President and Chief Economist Jordan Levine highlighted the increase in new active listings and noted that while mortgage rate fluctuations might influence potential sellers, rates are expected to decline later in the year, potentially improving inventory.

Overall, the California housing market in January 2024 reflects a dynamic environment with positive sales growth, a mix of regional performance, and indicators pointing towards a market that is adapting to changing conditions.

ALSO READ: Will the California Housing Market Crash in 2024?

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California Real Estate Market Regional Data

Los Angeles Metro Area witnessed a median sold price of $750,000, with a -1.3% month-to-month change. While sales experienced a -14.6% decrease month-to-month, the year-over-year data shows a 7.1% increase, hinting at a potential rebound.

Central Coast: The region recorded a median sold price of $926,000, showing a -5.5% month-to-month decline. However, the year-over-year figures reveal a 3.5% increase, indicating a stable market. Sales, however, saw an -11.3% decrease year-over-year.

Central Valley: With a median sold price of $460,000, the region experienced a marginal -0.4% month-to-month decrease. Year-over-year, sales grew by 6.8%, showcasing positive momentum.

Far North: Despite a -0.8% month-to-month decline in median sold price ($361,500), the region displayed resilience with a -2.0% year-over-year change. Sales figures, however, decreased by -6.9% year-over-year.

Inland Empire reported a median sold price of $559,280, reflecting a -1.9% month-to-month change. Despite this dip, the year-over-year data shows a 3.6% increase, indicating stability in the region. However, sales experienced a -12.1% decrease year-over-year.

San Francisco Bay Area, known for its dynamic real estate market, recorded a median sold price of $1,100,000, reflecting a -6.9% month-to-month change. Year-over-year, however, saw a 10.6% increase, showcasing the area’s resilience despite short-term fluctuations. Sales in this region, however, experienced a significant -24.3% decrease year-over-year.

Southern California maintained a median sold price of $790,000, with a 0.0% month-to-month change. Year-over-year, sales increased by 7.0%, hinting at stability and sustained demand in this region. However, sales saw a -12.2% decrease year-over-year.

California Housing Market Forecast 2024

On September 20, 2023, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) released its highly anticipated “2024 California Housing Market Forecast,” outlining key projections for the state’s housing market in the upcoming year.

Positive Rebound in California Housing Market

In 2024, the California housing market is expected to experience a rebound, primarily attributed to a decrease in mortgage rates. The forecast predicts a substantial increase of 22.9 percent in existing, single-family home sales compared to the projected pace of 2023.

Sales and Prices Projection

The forecast estimates a total of 327,100 units in single-family home sales for 2024, showcasing a promising rise from the projected 266,200 units in 2023. Additionally, California’s median home price is anticipated to climb by 6.2 percent to $860,300 in 2024.

Market Environment and Factors Influencing the Forecast

Factors like slower economic growth and cooling inflation are anticipated to bring down mortgage interest rates, creating a more favorable market environment to stimulate California home sales in the coming year. A housing shortage and competitive market are expected to continue exerting upward pressure on home prices.

Economic Indicators and Job Growth

The forecast takes into account economic indicators, predicting a modest 0.7 percent increase in the U.S. gross domestic product for 2024. The state’s nonfarm job growth rate is estimated to be 0.5 percent. However, the unemployment rate is expected to slightly increase to 5.0 percent in 2024 from the projected 4.6 percent in 2023.

Impact on Mortgage Rates and Housing Supply

With the expected softening of the economy in 2024, the Federal Reserve Bank is predicted to loosen its monetary policy, leading to a downward trend in mortgage rates throughout the year. This could provide buyers with greater financial flexibility, resulting in increased housing demand and further upward pressure on home prices. Despite an expected increase in active listings, housing supply is projected to remain below the norm.

The “2024 California Housing Market Forecast” by C.A.R. paints an optimistic picture of the state’s housing market, anticipating a significant rebound in home sales and a notable increase in median home prices. This forecast considers various economic factors and market conditions, providing valuable insights for both buyers and sellers. As the year unfolds, the actual market performance will undoubtedly shed more light on the accuracy of these projections.

How Competitive is the California Housing Market?

According to Zillow, the average home value in California currently stands at $750,709, reflecting a 4.4% increase over the past year. This growth signifies a robust real estate market in the state, providing homeowners with a positive outlook on their property investments. Homes in California are moving swiftly, going pending in approximately 21 days (Data through January 31, 2024).

California Housing Inventory Metrics

Understanding the available inventory is crucial for those navigating the California housing market. As of January 31, 2024, there are 55,924 homes available for sale. This figure provides potential buyers with insights into the overall housing supply, aiding in informed decision-making.

New Listings and Market Dynamics

For those actively monitoring the market, the number of new listings is a key indicator. As of January 31, 2024, there have been 16,522 new listings, showcasing the dynamic nature of California’s real estate landscape. This influx of new properties contributes to the variety of options available to potential buyers.

Sale Price Metrics

Examining sale price metrics is essential for both buyers and sellers to gauge market trends. The median sale price in California, as of December 31, 2023, is $693,667. Additionally, the median list price for homes on the market as of January 31, 2024, is $705,666. Understanding the variance between these two figures provides insights into pricing dynamics and potential negotiation points.

Sale-to-List Ratio and Pricing Strategy

The sale-to-list ratio is a crucial metric reflecting the effectiveness of pricing strategies. As of December 31, 2023, the median sale to list ratio in California is 1.000, emphasizing a balanced approach to pricing. This ratio indicates that, on average, homes are selling for their listed price, showcasing a market equilibrium.

Competitive Market Dynamics

Understanding the competitive nature of the market is vital for both buyers and sellers. As of December 31, 2023, 43.8% of sales in California were over the list price, while 42.5% were under the list price. These percentages highlight the competitive dynamics within the market, guiding buyers and sellers in making strategic decisions.

Top Areas in California Poised for Home Price Growth from 2024 to 2025

San Diego, CA

The metropolitan statistical area (msa) of San Diego, CA, is poised for notable home price growth. As of January 31, 2024, the projected growth for the period ending on February 29, 2024, is 0.4%, followed by a more substantial increase of 2% by April 30, 2024. Looking further ahead to January 31, 2025, the anticipated growth surges to 6.2%. These figures indicate a strong upward trajectory, making San Diego an area to watch for potential real estate investments.

Santa Maria, CA

Another region in California with promising home price growth is Santa Maria. The msa of Santa Maria is projected to experience gradual increases, starting with 0.1% by February 29, 2024, followed by 1.1% by April 30, 2024. The growth trajectory continues with an estimated 5.6% by January 31, 2025. This steady progression suggests a positive market sentiment and potential opportunities for both buyers and sellers in Santa Maria.

Bakersfield, CA

Bakersfield emerges as another notable region in California, showcasing consistent growth projections. As of January 31, 2024, the expected growth is 0.3% by February 29, 2024, and a subsequent increase to 1.3% by April 30, 2024. Looking ahead to January 31, 2025, the anticipated growth stands at 5.2%. These figures indicate a positive trend in Bakersfield, making it an area to watch for potential real estate developments.

Merced, CA

The msa of Merced demonstrates a pattern of steady growth in home prices. Starting with 0.4% by February 29, 2024, the growth progresses to 1.4% by April 30, 2024, and 4.8% by January 31, 2025. This upward trajectory suggests a favorable market environment in Merced, providing opportunities for those considering real estate transactions in the region.

Hanford, CA

Lastly, Hanford, CA, is identified as a region with notable potential for home price growth. With a projected growth of 0.4% by February 29, 2024, 1.4% by April 30, 2024, and 4.6% by January 31, 2025, Hanford presents itself as an area where real estate dynamics are on an upward trajectory. Investors and individuals in the housing market may find opportunities for growth and development in this region.

Fresno, CA

Fresno stands out as another area with positive projections. As of January 31, 2024, the expected growth is 0.3% by February 29, 2024, followed by a more substantial increase of 1.4% by April 30, 2024. Looking ahead to January 31, 2025, the anticipated growth remains strong at 4.5%. These figures position Fresno as a region where real estate dynamics are on an upward trajectory, offering potential opportunities for investors and individuals in the housing market.

Riverside, CA

Riverside is another metropolitan statistical area (msa) in California displaying positive growth trends in home prices. As of January 31, 2024, the projected growth is 0.2% by February 29, 2024, and a subsequent increase of 0.6% by April 30, 2024. Looking ahead to January 31, 2025, the anticipated growth stands at 4.2%. These figures suggest a steady and positive market sentiment in Riverside, making it an area of interest for those engaged in real estate transactions.

Modesto, CA

Modesto emerges as another region in California with notable potential for home price growth. As of January 31, 2024, the expected growth is 0.3% by February 29, 2024, and a subsequent increase of 1.3% by April 30, 2024. Looking ahead to January 31, 2025, the anticipated growth stands at 4.1%. These figures indicate a positive trend in Modesto, providing opportunities for those considering real estate transactions in the region.

Visalia, CA

Visalia is identified as a region with steady and positive growth in home prices. As of January 31, 2024, the projected growth is 0.3% by February 29, 2024, and a subsequent increase of 0.9% by April 30, 2024. Looking ahead to January 31, 2025, the anticipated growth stands at 4.1%. These figures position Visalia as an area where real estate dynamics are on an upward trajectory, offering potential opportunities for investors and individuals in the housing market.

Salinas, CA

Salinas concludes our exploration of regions with promising home price growth in California. As of January 31, 2024, the expected growth is 0.1% by February 29, 2024, and a subsequent increase of 1.1% by April 30, 2024. Looking ahead to January 31, 2025, the anticipated growth stands at 4.1%. These figures highlight Salinas as a region with positive market dynamics, providing potential opportunities for investors and individuals navigating the real estate landscape.

El Centro, CA

Our exploration of regions with promising home price growth in California continues with El Centro. As of January 31, 2024, the expected growth is 0.5% by February 29, 2024, followed by a more substantial increase of 1.5% by April 30, 2024. Looking ahead to January 31, 2025, the anticipated growth remains steady at 4.1%. These figures position El Centro as a region where real estate dynamics are on an upward trajectory, offering potential opportunities for investors and individuals in the housing market.

Yuba City, CA

Yuba City is another metropolitan statistical area (msa) in California showing positive growth trends in home prices. As of January 31, 2024, the projected growth is 0.1% by February 29, 2024, and a subsequent increase of 1.1% by April 30, 2024. Looking ahead to January 31, 2025, the anticipated growth stands at 4.1%. These figures suggest a gradual but positive market sentiment in Yuba City, making it an area of interest for those engaged in real estate transactions.

Madera, CA

Madera emerges as another region in California with notable potential for home price growth. As of January 31, 2024, the expected growth is 0.2% by February 29, 2024, and a subsequent increase of 0.8% by April 30, 2024. Looking ahead to January 31, 2025, the anticipated growth stands at 4%. These figures indicate a positive trend in Madera, providing opportunities for those considering real estate transactions in the region.

Stockton, CA

Stockton is identified as a region with steady and positive growth in home prices. As of January 31, 2024, the projected growth is 0.2% by February 29, 2024, and a subsequent increase of 1.3% by April 30, 2024. Looking ahead to January 31, 2025, the anticipated growth stands at 3.8%. These figures position Stockton as an area where real estate dynamics are on an upward trajectory, offering potential opportunities for investors and individuals in the housing market.

Oxnard, CA

Oxnard concludes our exploration of regions with promising home price growth in California. As of January 31, 2024, the expected growth is 0.2% by February 29, 2024, and a subsequent increase of 1.3% by April 30, 2024. Looking ahead to January 31, 2025, the anticipated growth stands at 3.7%. These figures highlight Oxnard as a region with positive market dynamics, providing potential opportunities for investors and individuals navigating the real estate landscape.

Sacramento, CA

Lastly, Sacramento is identified as a region with positive growth trends in home prices. As of January 31, 2024, the projected growth is 0.1% by February 29, 2024, and a subsequent increase of 1.1% by April 30, 2024. Looking ahead to January 31, 2025, the anticipated growth stands at 3.2%. These figures suggest a steady and positive market sentiment in Sacramento, making it an area of interest for those engaged in real estate transactions.

Is It a Good Time to Buy a House in California?

Examining the week’s activity ending on February 10, 2024, the following daily average figures were observed:

• Closed Sales: 339 per day
• Pending Sales: 498 per day
• New Listings: 485 per day

Realtors’ Insights

• Realtors Anticipating Increase in Sales: 36.8% (+28.4%)
• Realtors Anticipating Increase in Prices: 19.4% (+9.7%)
• Realtors Anticipating Increase in Listings: 44% (+32.5%)

Realtors, the frontline observers of market trends, provide valuable insights into the future trajectory of the housing market. According to recent surveys, **36.8% of realtors anticipate an increase in sales**, marking a substantial **28.4% increase** from previous assessments. Additionally, **19.4% of realtors foresee a rise in prices**, reflecting a **9.7% increase** in optimism compared to earlier sentiments. Moreover, **44% of realtors anticipate an increase in listings**, signaling a **32.5% surge** in expectations for available properties.

Despite the active market dynamics, California grapples with persistent challenges in housing affordability. In the fourth quarter of 2023, the housing affordability index hit a **16-year low** across the state. This index, which gauges the feasibility of purchasing existing single-family homes, remained stagnant at **15%** from the previous quarter.

The combination of soaring prices and escalating mortgage rates contributed to a noticeable uptick in borrowing costs. Consequently, the monthly mortgage payment for a median-priced home, inclusive of taxes and insurance, experienced a **0.7% increase** from the previous quarter and surged by **11.2%** from the same period in the previous year.

The rising interest rates further exacerbated the situation, with the effective mortgage rate reaching a **23-year high** of **7.39%** in Q4 2023. To afford the median monthly payment of **$5,570**, individuals needed a minimum annual income of **$222,800**. Looking ahead, while home prices are expected to continue their upward trajectory in 2024, there remains a glimmer of hope for prospective buyers. If mortgage rates experience a significant decline within the next year, there is potential for a slight improvement in affordability, albeit amidst the broader trend of rising housing costs.

In conclusion, navigating the California housing market presents both opportunities and challenges for prospective buyers. While market activity remains robust and realtors express optimism about future sales, the persistently low affordability index underscores the financial hurdles that buyers must overcome. As individuals weigh their options, understanding the market trends and anticipating potential shifts in affordability and interest rates will be crucial in making informed decisions regarding homeownership in the Golden State.

Housing Affordability Trends in California – 4th Quarter

The fourth quarter of 2023 witnessed a confluence of factors that have significantly impacted housing affordability. Elevated interest rates and a persistent shortage in home inventory have contributed to a 16-year low in housing affordability, according to the latest report from the California Association of Realtors (C.A.R.).

Current Affordability Landscape

During the fourth quarter of 2023, only 15 percent of California households could afford to purchase the median-priced home, which stood at $833,170. This figure remained unchanged from the previous quarter and marked a decrease from 17 percent in the same quarter of the previous year. These statistics highlight the persistent struggle for Californians aspiring to own a single-family home.

To put this into perspective, a minimum annual income of $222,800 was required to make monthly payments of $5,570. These calculations included principal, interest, and taxes on a 30-year fixed-rate mortgage with an interest rate of 7.39 percent. Notably, this interest rate is the second consecutive quarter where it rose above 7 percent in more than two decades.

Comparative Analysis: Condos/Townhomes vs. Single-Family Homes

While the affordability of single-family homes declined, there was a relatively better scenario for condominiums and townhomes. In the fourth quarter of 2023, 22 percent of homebuyers were able to afford the median-priced condo or townhome, which was pegged at $650,000. To make a monthly payment of $4,350, a minimum annual income of $174,000 was required.

This trend diverges from the broader housing market, where single-family homes face greater affordability challenges. The median price of condos and townhomes held up better than their single-family counterparts, showcasing a nuanced picture of the real estate landscape in California.

Insights from C.A.R.’s Traditional Housing Affordability Index (HAI)

C.A.R.’s HAI provides a comprehensive view of housing well-being for homebuyers in the state. The index, which measures the percentage of households that can afford a median-priced, single-family home, stands at 15 percent for the fourth quarter of 2023. This is a stark contrast to the peak high of 56 percent recorded in the first quarter of 2012, underscoring the long-term challenges in housing affordability.

The minimum annual income of $222,800 required to qualify for the purchase of a $833,170 median-priced home signifies the financial barriers faced by many Californians. The monthly payment, including taxes and insurance, has become a substantial financial commitment for aspiring homeowners.

Market Dynamics: Interest Rates and Economic Trends

Despite a modest decline in interest rates during the latter part of the fourth quarter of 2023, the overall trend remains elevated. Rates dropped by about 100 basis points from the peak in mid-October but have stabilized in recent weeks. This stability, coupled with unexpected economic resilience, has led to speculations that the Federal Reserve might refrain from rate cutting at their upcoming March meeting.

This scenario suggests that elevated interest rates are likely to persist through the first half of the year, putting continuous downward pressure on affordability. The real estate market in California is navigating through a complex interplay of economic factors that impact the ability of households to enter the housing market.

National Perspective: California vs. the Rest of the Nation

When compared with the national average, California’s housing affordability paints a challenging picture. While 15 percent of households could afford the median-priced home in the state, more than a third of the nation’s households could afford a $391,700 median-priced home, requiring a minimum annual income of $104,800 to make monthly payments of $2,620. This discrepancy underscores the unique challenges faced by Californians in the real estate market.

Regional Disparities: A Closer Look at County-Level Housing Affordability

The housing affordability landscape in California is characterized by significant regional disparities, as evident in the county-level analysis provided in the fourth-quarter 2023 report. Key findings highlight the dynamic nature of affordability, showcasing variations between counties and the impact of changing market conditions.

Quarterly Changes

Comparing the fourth quarter of 2023 with the previous quarter, housing affordability declined in 15 counties, while it remained unchanged in 17. Notably, 19 counties exhibited improvements in affordability, attributed to more modest price declines compared to other regions during the same period. This nuanced interplay between counties underscores the localized nature of the challenges faced by potential homebuyers.

Year-Over-Year Trends

On a year-over-year basis, the report highlights that five counties experienced an improvement in affordability, while 39 counties recorded a decline, and seven remained unchanged. These trends provide insights into the evolving nature of housing affordability, with certain regions facing more acute challenges compared to others.

Most and Least Affordable Counties

At the forefront of affordability, Lassen County maintained its position as the most affordable county in California, boasting an affordability index of 49 percent. Alongside Tehama County (40 percent), these two counties were the only ones with an affordability index of 40 percent or higher in the fourth quarter of 2023. The Far North region of the state dominated the top three, with Shasta County (36 percent) securing the third spot.

Conversely, Mono County (5 percent), Monterey County (8 percent), and San Luis Obispo County (8 percent) emerged as the least affordable counties. These regions required a minimum income of at least $242,800 to purchase a median-priced home. At the top of the list, San Mateo County demanded the highest minimum qualifying income, surpassing $500,000, followed by Santa Clara County and Marin County.

Yearly Affordability Changes

Examining the year-over-year changes, Mariposa County witnessed the most significant decline, dropping nine points from the fourth quarter of 2022 to the same period in 2023. Kings, Stanislaus, and Yuba followed closely, registering a six-point decrease in affordability. Despite higher household income, elevated home prices, and increased mortgage rates, several counties, including San Bernardino, Glenn, Merced, Sacramento, and Lassen, experienced a notable decline in affordability, emphasizing the broader challenges across the state.

As the cost of borrowing remains near all-time highs, and housing affordability faces headwinds, understanding these county-level dynamics becomes crucial for both policymakers and prospective homebuyers seeking to navigate California’s diverse real estate landscape.

Challenges Facing the California Housing Market in 2024

Several factors have contributed to the challenges facing the California housing market. Here are some key factors that interact with each other, creating a complex and dynamic housing market in California.

1. High Demand and Limited Supply:

California has a high population density and strong economic growth, leading to a high demand for housing. However, there is a limited supply of available housing, particularly in desirable areas. This imbalance between supply and demand has driven up housing prices, making it difficult for many prospective buyers to afford homes.

2. Affordability Issues:

The high cost of housing in California has made homeownership less attainable for many residents. The median home price in the state is significantly higher than the national average. The combination of high home prices, rising interest rates, and stringent mortgage qualification rules has created affordability challenges for prospective buyers.

3. Strict Zoning and Land Use Regulations:

California has some of the most stringent zoning and land use regulations in the country. These regulations often restrict new construction and development, making it difficult to increase the housing supply to meet demand. This has resulted in a housing shortage and contributed to the rising prices.

4. Lack of Affordable Housing:

California faces a severe shortage of affordable housing, particularly in major cities. The cost of constructing affordable housing and the complex process of obtaining approvals and permits have hindered the development of affordable units. This has exacerbated the affordability crisis and led to a growing population of renters.

5. Economic Factors:

Economic conditions, such as job growth, wages, and interest rates, can significantly impact the housing market. Slowing economic growth or stagnant wages can dampen demand for housing, while rising interest rates can increase borrowing costs and dissuade potential buyers. These factors, in combination with high housing prices, have made it challenging for many Californians to enter the housing market.

6. Impact of Natural Disasters:

California is prone to natural disasters, including wildfires and earthquakes, which can damage or destroy homes and disrupt the housing market. Rebuilding efforts and insurance costs following these events can impact housing availability and affordability in affected areas.

7. Migration Patterns:

Migration patterns also play a role in the housing market. California has experienced both domestic and international migration, leading to increased demand for housing. However, in recent years, there has been a trend of net outmigration, with some residents leaving the state due to affordability concerns, congestion, and other factors. This can impact the supply and demand dynamics of the housing market.

California Rent Prices

According to the latest California rent report for Q3 2023 by Rentometer, the average rent prices for three-bedroom (3-BR) single-family rentals (SFRs) in these five cities: Los Angeles, Sacramento, San Diego, San Francisco, and San Jose. San Diego had the largest year-over-year rent increase of 8%, while San Jose had the smallest increase of 2%.

Rent prices in these five California cities experienced the following year-over-year rent increases in Q3 2023:

• The average San Diego rent price is $4,595 with a year-over-year rent price increase of 8%
• The average San Francisco rent price is $5,431 with a year-over-year rent price increase of 5%
• The average Los Angeles rent price is $5,172 with a year-over-year rent price increase of 5%
• The average Sacramento rent price is $2,550 with a year-over-year rent price increase of 4%
• The average San Jose rent price is $4,061 with a year-over-year rent price increase of 2%

City/State	Q3 2022 Average Rent	Q3 2023 Average Rent	YoY % Change
San Diego, CA	$4,262	$4,595	8%
San Francisco, CA	$5,166	$5,431	5%
Los Angeles, CA	$4,949	$5,172	5%
Sacramento, CA	$2,457	$2,550	4%
San Jose, CA	$3,981	$4,061	2%

 

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Sources:

• https://www.car.org/
• https://www.car.org/aboutus/mediacenter/newsreleases
• https://www.car.org/marketdata/data/countysalesactivity
• https://www.car.org/marketdata/marketforecast
• https://www.car.org/marketdata/marketminute
• https://www.car.org/marketdata/interactive/housingmarketoverview
• https://www.zillow.com/ca/home-values
• https://www.rentometer.com/california-home-rents