Pending Home Sales Crater in California as Median Price Nears $900K

The disparity between the growth trajectory of high-income housing submarkets in California and a decline in overall home sales in the Golden State continues to widen. 

According to the most recent monthly Sales and Price report from the California Association of Realtors, California’s median home price set another record in April at $884,890, 4.2% higher than the $849K recorded in March and 8.7% higher than the April 2021 level of $814K, which was a record at the time.

The share of sales for million-dollar homes increased in California for the third consecutive month, hitting a record of nearly 35%. Home sales in high-income submarkets in CA continue to be brisk, and tight supply is seeing wealthy buyers bid up prices: nearly 73% of homes sold in April fetched sale prices above the asking price, CAR says.

But affordability—in addition to record home prices, average mortgage payments in California grew nearly 37% YOY in April—is squeezing the vitality out of the market for homes priced lower than $750K in CA.

CAR reported that sales dropped by double-digits for price segments $750K and lower in April in California. The report said overall pending sales cratered, dropping by nearly 25 percent, the worst decline since the pandemic lockdown of April 2020.

“With April pending home sales recording the worst drop in two years, the affordability challenges that buyers have been encountering are materializing in recent sales trends, and further declines in housing demand could continue in the second half of the year,” said Jordan Levine, CAR VP and chief economist.

April’s statewide sales pace was down 1.9% from the 427K recorded in March and down 8.5% YOY in April, the largest drop in the monthly YOY comparison thus far this year.

California’s Central Coast registered the steepest regional decline in YOY sales rates in April, dropping 21.3%, CAR said. Other regions with double-digit declines in sales YOY were the San Francisco Bay Area, down 18.1%, and Southern California, which declined 16%.

According to CAR, 26 counties in California set new record median highs in April for home prices, with Mono County recording a YOY median price rise of more than 142%.

On the positive side, CAR reported that active listings surged in April by 20% YOY, the largest increase since January 2019. Three counties recorded triple-digit YOY increases in listings: Yuba, where listings surged by 176.7%, Sutter (108.7%) and Glenn (100%).