If you want to buy a house in California, good luck. The median home price is $758,990, which is up nearly 24% from a year ago, according to The California Association of Realtors. And in March, it took eight days on average to sell a single family home, compared to 15 days in March 2020.
Prices have hit a record high due to an explosion of demand, says Andrew Khouri, who covers the housing market for the LA Times.
“People have been wanting more space. Mortgage rates are … below 3%, which is unheard of,” he says. “At the same time, supply is down, and there's not many homes for sale. People are bidding prices up and purchasing homes in then record time.”
Also, the actual process of buying a home has changed due to the pandemic. Khouri says prospective homebuyers must book an appointment to view a property, and many arrive with a pre-approval mortgage letter in hand.
“A homebuyer explained it to me as thinking it was kind of like speed dating. But you're expected to get married at the end of this right? And that's nerve racking for a lot of people.”
It’s too early to tell exactly which people are buying homes, but Khouri says some of the demand might be from first-time buyers who were tired of living in apartments during the pandemic.
“A lot of analysts think that this sped up a lot of purchases that would have occurred several years down the line. And people are just making the decision to buy now, particularly millennials who are kind of increasingly entering their early 30s, which is when a lot of people buy their home for the first time anyway.”