What’s going on in the California housing market? August 2020 Real Estate Update

Hello, September? 

Yep. We’re already here… and it feels like the year is just blazing ahead. Yet another season’s passed underneath the umbrella of 2020’s pandemic conditions. August was a major point in the market recovery period as we’re slowly approaching the lasting effects of COVID’s ‘new normals’ – and hopefully, feeling a bit more comfortable navigating this terrain. 

Meanwhile, a lot is going on in California’s real estate market. The last time we came together like this to discuss the local conditions was back in July when the nation had just dipped our toes into market re-openings. At that time, the outlook remained incredibly hazy. But, now that we’re weeks past these initial ‘breaking the ice’ moments, we have a far better ground to move forward on. 

August’s New Outlook  

By the end of August, life in California seemed to be balancing out. Unemployment rates finally fell below the 10% bracket to 8.4%, the commercial service sector expanded, small businesses continually overcame the pressing challenges, and construction and industrial projects paved ahead. These factors contributed to growing security and stability in the statewide economy. 

After the pandemic effects eased and real estate sales were able to move forward again after months of market drought, eager buyers picked off the market’s listings at incredible speeds. Historically low mortgage rates hovering around 2.9% is another factor that kick-started sales. Now, the housing market is seeing a reduction of active listings – presenting a new challenge for California real estate. 

However, the outlook is bright – maybe not 100% crystal clear just yet – but certainly closer to being predictable. Navigating the 2020-2021 junction will be about resilience, strategy, and flexibility. 

Without further ado, let’s dive right into a rapid-fire exploration of California’s real estate market data collected in August with a special highlight to the DMAs. 

Los Angeles

• 22,834 homes were posted for sale this August, marking a change of -3% MOM and -38% August YOY. 
• 14,942 listings were sold in LA, a decline of -2% MOM and -1% August YOY. 
• The average listing price for homes in Los Angeles was $810,487, showing positive growth of +4% from July 2020 and +11% August YOY. 
• Average price per square foot was $403.80, also demonstrating an uptick in price MOM and YOY. 

San Diego 

• 3,762 listings were posted for sale in San Diego, -1% less than July 2020, and a whopping -42% less than August 2019. 
• 3,305 San Diego homes were sold last month, marking positive +3% August YOY growth. 
• Prices are on the rise in San Diego’s housing market both YOY and MOM. 
• The average listing price was $837,986, +12% higher than August 2019, and +3% higher than July 2020.
• The average price per square foot was $409.10, +17% higher MOM, and +20% higher August YOY. 

Bay Area

• August had 7,356 total listings for sale in the Bay Area, a +1% MOM growth but a -9% YOY decline. 
• 5,447 homes sold in August in the Bay Area, marking a -8% decline in MOM sales but a 6% growth compared to August 2019. 
• The average selling price for Bay Area homes was $1,286,057, showing positive gains for both MOM (+2%) and YOY (+17%). 
• Pricing per square foot also increased, with August’s average leveling at $678.72, demonstrating growth of 1% MOM and +10% YOY.
• The total sales in the East Bay region topped off at $2,546,604,489, -3% MOM but +21% August YOY. 
• Total sales in the Peninsula reached $3,647,816,592, marking -9% MOM and +27% August YOY growth. 
• San Francisco’s total sales capped at $810,730,816, a -6% MOM decline but an +18% YOY growth. 

Sacramento

• 4,449 listings were posted for sale in Sacramento, demonstrating a -51% decrease from August 2019 and a -8% MOM decrease. 
• 4,473 homes sold in August, marking +2% YOY gains but a -8% MOM decrease. 
• The average selling price was $478,487, a +12% YOY and a +1% MOM increase. 
• The average price per square foot was $250.30.

The Break Down

Overall, California’s housing market is experiencing an inventory constriction as buyer demands continue to rise while new listings are slow to be added. As a result, the statewide environment seems to be converging into a seller’s market. All the while, California REALTORS® reported an improvement in their business as transactions continue to move forward. 

Moving ahead, low inventory and intense buyer interest mixed with a general atmosphere of uncertainty will continue to set the stage for California’s housing market. Keep an eye out for the upcoming coverage of CA’s evolving real estate sphere with Reali’s monthly market updates. If you’ve missed out on the last few rounds of reports, head back to the Reali blog and check them out.