California's Housing Market Soars In 2020 Despite Pandemic Hurdles

With California making up a significant amount of the total U.S. housing market, the states' ability to overcome two lockdowns and a struggling economy during a global pandemic, while recording solid sales and a fifth record-high median price in December 2020, speaks volumes in terms of the housing markets' resiliency, during one of the toughest financial periods in the U.S. The California Association of Realtors' latest report showed how well the state closed out 2020.

According to the report, closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 509,750 units in December. Additionally, home sales increased 0.2% from 508,820 in November 2020 and was up 28% from 2019.

"It's a testament to the strength of the market that even after the pandemic effectively shut down the spring home-buying season in 2020, the market still was able to recover the substantial sales lost in the first half of the year and even top 2019's levels," said C.A.R. president Dave Walsh, vice president and manager of the Compass San Jose office. "With mortgage rates expected to stay near the lowest in history, demand for homeownership will continue to be strong, so home sales should remain elevated into the first half of 2021, as motivated buyers take advantage of the increased purchasing power."

"Home prices, which usually peak during the summer, were unseasonably strong in December," added C.A.R. vice president and chief economist Jordan Levine. "The imbalance between supply and demand continues to fuel home price gains as would-be home sellers remain reluctant to list their homes during the pandemic, contributing to a more-than-40-percent year-over-year decline in active listings for the seventh straight month."

C.A.R.'s monthly Consumer Housing Sentiment Index, conducted in January, revealed that 59% of consumers said that it is a good time to sell, up from 55% the previous month.

Click here to learn more about the resilience of California's housing market during the pandemic.