California’s housing market slowed significantly in 2023 as interest rates rose to a 23-year high and inventory slumped across the state. Home prices did not rise as much as they did during the first few years of the pandemic, and some areas, especially in the Bay Area, even saw price growth decline. But even amid the economic slowdown, the Greater Bay Area region remains the most competitive place to buy a home in the state, according to data provided to SFGATE by real estate firm Redfin.
According to Redfin, seven of the top 10 cities in California for home purchase competition, based on data from January to November 2023, were in the Bay Area. Data for December has not yet been finalized. Redfin analyzes the number of days on the market, the number of offers a home receives, how often contingencies are waived, and the sales-to-listing ratio to come up with a total score.
Mountain House, a small planned community in San Joaquin County, is popular with people looking for something affordable just outside the Bay Area and ranks on the list of California’s most competitive cities to buy a home. It came out on top, with the average home sale price about 2% above the list. It takes an average of 9 days to decide on a price and accept an offer. In November 2023, his 77.8% of Mountain House homes sold at high prices, while in the same period in 2022 he sold at 15.4%.
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Newark and San Leandro came in second and third on the list, followed by Sunnyvale, Cupertino, San Lorenzo and Santa Clara, respectively.
The least competitive cities were Laguna Beach, followed by Joshua Tree, and Idyllwild-Pine Cove.
California home prices rose fastest in Tustin in 2023, according to Redfin data. In the Orange County town south of Anaheim, prices rose 11.7% year over year, with the median home price at $1 million. The second most dramatic price increase of the year was in Coachella, a small city on the eastern edge of the Coachella Valley known for its annual music festival, where home prices rose 11.5%.
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Chowchilla, northwest of Fresno, rose 11.3% in 2023. The median price for this town, which is home to two state prisons, is $409,261.
Malibu, Live Oak, and Beverly Hills had the lowest price increases. Berkeley, Albany, Burlingame, Lafayette, Millbrae, and Alameda each ranked in the 5th through 10th places with the lowest price increases in the state.
Redfin’s search results show the Bay Area appears to be over, but it remains the area in the state people are least interested in moving to. Los Angeles ranks second behind San Francisco, and the state’s largest metropolitan area for immigration is Sacramento, followed by Bakersfield.
Darryl Fairweather, Redfin’s chief economist, said the trend of Californians moving inland is not likely to slow any time soon. He said people’s desire for more space and better affordability has increased during the pandemic, and Fresno and Bakersfield in particular will see further increases in 2024. “I think of migration as a cascade, and the Bay Area is at the apex of affordability. There’s nothing to feed it,” Fairweather said. “Fresno and Bakersfield are a bargain right now.”
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