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California's divided housing market, as told by 2 maps

While national home prices are hovering around all-time highs, some pockets of the country have fallen from their frothy peaks in spring 2022.

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AI generated image of “California’s housing market” by ResiClub

At the height of the Pandemic Housing Boom frenzy, this 5-bedroom house at 1025 Ardmore Ave in Oakland, Calif. was sold for a whopping $4.1 million in March 2022.

Fast-forward to January 2024, and the home was listed for sale again at $2.998 million, or -26.9% below the March 2022 sale price. That lower price tag doesn’t appear to be an agent tactic, given that on April 1, 2024, the price was cut to $2.55 million. This latest price tag is -37.8% below its March 2022 sale price of $4.1 million); however, it still remains +45.7% above its November 2020 sale price ($1.75 million).

While national home prices are essentially hovering around all-time highs, some pockets of the country, especially at the higher price tiers, have fallen from their frothy peaks in spring 2022.

Look no further than the 94610 ZIP code in Oakland—the location of the home above—where home prices have dropped by -16.7% from their 2022 price peak and by -4.4% on a year-over-year basis, according to ResiClub’s analysis of the Zillow Home Value Index.

Why are home prices down in Oakland’s 94610 ZIP code? For today’s issue, ResiClub takes a deep look at California home prices.

Click here to view an interactive/zoomable version of the map below

The analysis by ResiClub ABOVE shows that home prices across much of Northern California, particularly in markets like San Francisco and Oakland, remain below their 2022 price peak. Meanwhile, many parts of Southern California, particularly in San Diego and Los Angeles, are at or just above their 2022 price peak.

Before we get into the WHY, let’s look at just the past 12 months in California.

The analysis BELOW by ResiClub shows that home prices in most of California have remained flat or have increased over the past 12 months. Additionally, in some markets such as San Diego and Los Angeles, the year-over-year home price jump between February 2023 and February 2024 has been fairly significant.

Click here to view an interactive/zoomable version of the map below

So what exactly has happened in California’s housing market since spring 2022?

As mortgage rates spiked from 3% to over 6% in 2022, housing markets across much of the Western half of the country—where price-to-rent ratios were strained and buyers were already stretching themselves thin to enter the market—slipped into home price correction mode as affordability became too burdensome for many buyers out West. However, as mortgage rates stabilized entering 2023 and resale inventory began to fall, many Western housing markets began to stabilize, and home prices began to rise again in some Western/Californian markets. This 2023 jump was significant enough in most parts of Irvine and San Diego to erase all of the price declines that occurred in the second half of 2022.

While home price declines have also slowed or reversed in Northern California, including markets like Oakland, most Northern California markets are still below the 2022 price peak. One theory for the divergence between Northern and Southern California is the interest-rate-sensitive tech sector, which dominates up north. While the A.I. boom has boosted things up over the past 12 months, much of the sector is still adjusting to the higher interest rate environment. In other words, housing markets in San Francisco and Oakland are feeling the absence of those IPOs.

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On Wednesday, it was confirmed that there was a consumer class action filed against United Wholesale Mortgage this week, which accuses the company of scheming with brokers to push home-buyers into “expensive mortgages, costing them billions of dollars in excess fees.”

On Wednesday, the FTC announced it is “sending payments totaling nearly $62 million to 54,689 homeowners who sold their home to Opendoor Labs.” The payout stems from the August 2022 action by the FTC, when it went after Opendoor for allegedly “cheating potential home sellers by tricking them into thinking that they could make more money selling their home to Opendoor than on the open market using the traditional sales process.”

On Wednesday, Hines announced its first-ever U.S. build-to-rent acquisition. The global real estate investment firm has acquired Blu South, a build-to-rent (BTR) community located in North Carolina. Once completed in Q3 2025, the community will have “551 individually platted homes ranging from three- and four-bedroom townhomes, single-family detached houses, and duplexes across 75-plus acres.“