California’s median home price crosses $900,000 threshold

“How expensive?” tracks measurements of California’s totally unaffordable housing market.

The pain: The typical California house for sale now costs more than $900,000.

The source: My trusty spreadsheet looked at the California Association of Realtors report, which says the statewide median price for an existing single-family house reached $904,210 in April. It was a first for the median, which gained 5.8% in a month and 11% in a year.

The pinch

It was only March 2022 when the median crossed the $800,000 for the first time.

There’s a steep price to California’s record pricing – a broad lack of affordability. The association reported the number of California homebuyers in April was below 300,000 for the 19th consecutive month. Homebuying in the state has averaged 402,000 sales a month since 1990.

Note that a house hunter seeking a California house hunter needed a $208,000 household income to qualify to buy the median-priced residence of $814,000 in 2024’s first quarter, a previous study by the association said.

Pressure points

Let’s take a stroll down memory lane, looking at $100,000 thresholds since this price yardstick first crossed the $200,000 mark in March 1991, at the end of that era’s housing bubble.

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By the way, that month’s 9.5% average 30-year mortgage rate, with a 20% down payment, created a payment of $1,345 a month for a buyer spending the threshold price.

$300,000 first crossed in March 2002: Yes, it took 11 years for the next landmark price to fall, as the 1990s were not kind to California’s economy or its housing market. Home sales averaged 377,000 a month in this period. The month’s 7% rate created a monthly payment of $1,598 at this threshold – up 19% from what a buyer theoretically paid when $200,000 was first topped.

$400,000 in August 2003: The early 2000s economic boom translated to a $100,000 climb in a record-fast 17 months. History tells us the upswing was a hint of trouble ahead. Home sales soared to 514,000 monthly. The month’s 6.3% rate created a monthly payment of $1,972 – up 23% from the previous threshold.

$500,000 in April 2005: In 20 months, another benchmark was topped. This was the peak of the easy-money days, creating a massive bubble that burst into the Great Recession. Home sales got even hotter to 572,000 a month. The month’s 5.9% rate created a monthly payment of $2,362 – up 20% from the previous threshold.

$600,000 in May 2018: The ensuing housing debacle meant it took 13 years for the next $100,000 barrier to be crossed. Sales cooled to 415,000 in this tumultuous period. The month’s 4.6% rate created a monthly payment of $2,458 – up 4% from the previous threshold.

$700,000 in August 2020: The pandemic’s push for more living space created momentum for the next barrier to fall in 27 months. Sales dipped to 387,000 amid coronavirus economic challenges. The month’s 2.9% rate created a monthly payment of $2,343 – a drop of 5% from the previous threshold.

$800,000 in March 2022: Historically cheap mortgage rates helped to inflate prices passed this $100,000 barrier in only 19 months. The buying pace quickened, too, to 454,000 a month. The month’s 4.2% rate created a monthly payment of $3,119 – up 33% from the previous threshold.

$900,000 in April 2024: The limited number of qualified house hunters have battled over a thin inventory of homes listed for sale as rates hit highs not seen in 20-plus years. As a result, sales have averaged a meek 280,000 a month in this 25-month period. The month’s 7% rate created a monthly payment of $4,785 – up 53% from the previous threshold.