California home sales tick higher, median price sets another all-time high in March

California’s housing market stayed strong in March with the statewide median home price setting another record high, primarily due to a surge in sales of higher-priced homes, according to the California Association of Realtors’ latest home sales and price report. Competition remains fears with buyers seeking to purchase a home before mortgage rates continue to creep upward.

Closed escrow sales of existing, single-family detached homes in the state totaled 426,970 in March, up 0.5% from 424,640 in February. Sales were down 4.4% from a year ago.

“With homes still selling at a rapid clip and more homes selling above asking price than last summer when prices were at record highs, California’s housing market continues to perform remarkably well as buyers enter the market to get ahead of rising mortgage interest rates,” said C.A.R. President Otto Catrina. “An increase in active listings for the first time since prior to the pandemic should give consumers more options and alleviate some of the upward pressure on home prices, which bodes well for prospective buyers.”

California’s median home price reached a new record high in March at $849,080, surpassing the previous record of $827,940 in August 2021. The March price was 12% higher than the $758,990 recorded last March and a 10% increase from February.

According to C.A.R, the surge in sales at the top end of the market was the primary factor for the jump in the statewide median price at the end of the first quarter. The share of million dollar home sales increased for the second consecutive month, surging to 32.9% in March, the highest level on record. Additionally, strong month-to-month sales growth in the San Francisco Bay Area contributed to the jump in sales of million-dollar homes statewide, as 70% of the region’s sales were priced above $1 million, and sales in the region increased 70.5% from February.

Sales in the Silicon Valley counties of San Mateo and Santa Clara saw a year-over-year slight decrease of 1.9% and 2%, respectively, but the number of sales surged when compared to the previous month, with March sales up 91% in San Mateo County and up 79.6% in Santa Clara County.

The median price of single-family homes in both counties surged, as well. San Mateo County’s median home price reached $2,280,000 in March, 8.6% above the February median of $2,100,000, and 15% more than $1,985,000 in March 2021. Santa Clara County’s March median sale price reached an alltime high of $1,950,000, 7% higher than $1,820,000 in February, and 22% higher than $1,600,000 in March last year.

“Silicon Valley’s housing market continues to be very robust with most cities seeing substantial sales and an increase in sale price compared to last month. Sale-to-price ratios at 115% in San Mateo County and 118% in Santa Clara County, lets us know there is a ton of competition out there, as buyers continue to pay over list price.” said Brett Caviness, president of the Silicon Valley Association of Realtors. “Many buyers want to lock in good rates before more rate hikes are announced.”

Just last week, the average 30-year, fixed-rate mortgage jumped to 5%. C.A.R. Vice President and Chief Economist Jordan Levine noted the effects of higher mortgage interest rates will not be realized for a few more months.

“With the Federal Reserve expected to announce two back-to-back half-point interest rate hikes in May and June to combat inflation, interest rates will be elevated for the foreseeable future, adversely affecting housing demand and lowering housing affordability in the coming months, but the effects may not be visible until the second half of the year as many of the homes that are, or will be, closing were negotiated before the sharp increase in rates,” said Levine.