In California, the line between city life and country living has blurred in recent years.
Comparing this shift to the post-recession years before it, its clear that Californias housing map is being redrawn.
Urban areas like Los Angeles, San Francisco, and San Diego were very expensive.
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Many buyers in cities were younger professionals or families paying a premium to live near jobs.
Urban vs.
However, rural areas and smaller cities in California also saw interest from buyers seeking relief from high prices.
Regions in the Central Valley and Inland Empire offered larger homes or yards at lower prices than coastal cities.
Others were first-time buyers who simply couldnt afford urban real estate and looked to smaller towns.
Long commutes were common for those who moved far from job centers.
Upsizing was a trend for growing families and those with improving finances.
Vacation home purchases were not especially notable in 20182019 the big surge in second homes was yet to come.
But soon after, the housing market took off.
By late 2020 and into 2021, California was in a housing frenzy.
Sacramentos Boom
Sacramento became one of the top destinations for movers.
Vacation Areas Flourish
Even some truly rural communities saw new interest.
Coastal vacation towns and mountain communities experienced a boom.
California, with its attractive getaway spots, was a big part of that story.
Rents in expensive cities actually went down somewhat in 2020 as some residents moved out.
Condo sales in downtown areas were softer as remote workers no longer needed to be steps from the office.
Record Sales and Competition
The pandemic homebuying frenzy led to record-high sales and intense competition.
Many homes sold within days with multiple offers.
Statewide, 2021 was called the ultimate sellers market.
30-year mortgage rates hitting an all-time low of around 2.65% in early 2021 further fueled the buying spree.
This meant fewer people downsizing, which kept housing inventory tight.
The buyers who were active tended to be those with secure, remote-friendly jobs often higher-income professionals.
One major factor was rising mortgage interest rates.
This sharp rise made monthly payments much more expensive and slowed down the homebuying rush.
Cooling Migration Patterns
The urban-to-rural migration trend continued, but at a slower pace.
The peak of relocation seemed to have passed.
This was slightly down from a year earlier, marking the first decline in that stat on record.
Flexibility to work remotely had decreased for some, as more employers insisted on office attendance.
Rural California continued to see interest, especially from those who maintained fully remote jobs or retirees.
Market Slowdown
The number of home sales in California dropped in 2022 compared to the record 2021.
There were roughly 20-25% fewer homes sold in 2022 than in 2021.
Buyers faced higher borrowing costs due to the interest rate jump, which priced some out.
Affordability hit a record low only around 16% of California households could afford the median-priced house.
Many first-time buyers had to put their plans on hold.
Changes in Home Preferences
In 20222023, the rush to upsize eased a bit.
Those who desperately wanted bigger homes largely made their moves in 20202021.
By 2023, buyers were more cautious.
Some who moved far out for space reconsidered if they had to start commuting a few days a week.
Downsizing which had been subdued during COVID started to pick up slightly as the pandemic worries waned.
Higher interest rates and prices made second homes less attractive.
Californias popular vacation spots remained pricey due to limited supply.
Demographic Shifts and Challenges
One striking change during 20182023 was the aging of the first-time homebuyer.
In 2022, first-time buyers made up only 26% of homebuyers, down from historical norms.
The median household incomes of California homebuyers also rose over this period.
Impact of Economic Cycles
The 20082017 period began with the housing market crash.
The Great Recession (around 20082011) saw home prices in California plummet and sales volumes drop sharply.
Many urban and rural areas alike suffered foreclosures.
By contrast, 20182023 started with a strong economy and then saw a sudden pandemic shock.
But instead of a crash, home prices surged during the pandemic.
Where 20082011 was a time of fear and forced selling, 20202021 became a time of frenzied buying.
Homebuying Volume
After the crash, homebuying in 20082012 was slow.
Then 20222023 saw a dip, whereas the earlier decade saw a more gradual climb.
Urban vs.
Rural Preferences
In the earlier decade, remote work was rare.
Most people had to live within commuting distance of their jobs.
This meant urban areas and suburbs near cities were consistently in demand.
But in 20202021, they moved because suddenly location didnt matter as much for work.
The result was a more pronounced blending of urban and rural demand.
Upsizing was limited in the early 2010s because even if prices were low, credit was tight.
Yet, nothing in 20082017 compares to the vacation-home boom of 20202021.
The median first-time buyer age rising to 36 by 2022 illustrates that it took longer to achieve homeownership.
Also, incomes of buyers in the 2020s were higher out of necessity.
In 20182023, especially post-2020, the buyer pool skewed toward dual-income professional households and others with high-paying jobs.
Compared to 20082017, the differences are stark.
As of 2023, Californias homebuying landscape is still evolving.