California’s real estate market in 2024 presented a complex mix of affordability challenges, foreclosure activity, and evolving sales trends, according to the latest reports from ATTOM. The Q4 2024 Home Affordability Index revealed mounting pressures on homebuyers, with affordability well below historic benchmarks in many counties due to rising home prices and slower wage growth. Meanwhile, ATTOM’s Year-End Foreclosure Report showcased a stable yet modest increase in foreclosure activity, far removed from the peaks of the housing crisis years. Additionally, key sales trends highlighted shifts in buyer preferences, with increases in cash and institutional investor activity alongside steady reliance on FHA financing. Together, these insights paint a nuanced picture of California’s housing market in a period of economic and market transformation.
Home Prices and Affordability
The Q4 2024 Home Affordability Index report from ATTOM highlights the affordability challenges facing homebuyers across all counties in California. The data reveals that the affordability index for many counties remains below the historic benchmark of 100, signaling that homes are less affordable compared to long-term averages. Counties like Alameda, Los Angeles, and Santa Clara show affordability index values well below 100, indicating significant affordability pressures driven by rising home prices and slower wage growth. Notably, the affordability gap is widening in areas with higher population densities and median home prices exceeding $1 million, such as Marin and San Mateo counties.
Despite these challenges, the data also highlights areas of relative affordability. Counties such as Kings, Kern, and Madera have more favorable affordability index scores compared to coastal areas, with lower median home prices and housing costs that are closer to historic norms. However, even in these regions, housing costs are rising faster than wage growth, creating additional strain for buyers. This report underscores the continued challenges for California residents in balancing housing costs with income, particularly in high-demand regions.
Foreclosure Trends
According to ATTOM’s latest Year-End 2024 foreclosure report, California reported 33,387 properties with foreclosure filings, representing 0.23% of housing units, or approximately 1 in every 432 housing units. This reflects a slight increase from 32,905 properties in 2023, showing stability in foreclosure activity year-over-year. However, foreclosure rates remain significantly lower than historical highs during the housing crisis years, such as 2010, when 4.08% of housing units in California had foreclosure filings.
The data also highlights the sharp decline in foreclosure activity over the past decade, dropping from 0.41% in 2017 to the current levels of 0.23% in 2024. This long-term improvement reflects stronger housing market fundamentals, increased equity among homeowners, and tighter lending standards implemented after the 2008 financial crisis. Still, foreclosure filings remain an important metric to monitor as economic pressures like inflation and interest rates impact California’s housing market.
Sales Trends
California’s most recent Year-End 2024 home sales report reveals notable trends in the real estate market:
- FHA Sales Share: California’s FHA sales share increased from 7.7% in 2022 to 9.7% in 2023, before slightly declining to 9.3% in 2024, indicating stable reliance on FHA loans for buyers.
- Cash Sales Share: Cash sales rose significantly, from 27.1% in 2022 to 33.4% in 2024, showcasing a growing trend of cash buyers in the competitive California market.
- Institutional Investor Sales Share: Institutional investor sales share remained steady, moving from 5.5% in 2022 to 5.8% in 2024, reflecting continued interest from investors in California’s housing market.
- REO Sales Share: California’s REO sales share rose from 0.6% in 2022 to 0.8% in 2023, before slightly declining to 0.7% in 2024, reflecting modest fluctuations in bank-owned property sales.
Conclusion
ATTOM’s 2024 data underscores the ongoing challenges and opportunities within California’s dynamic housing market. While affordability continues to decline in many areas, foreclosure rates remain low, reflecting improved market stability. At the same time, the rise in cash sales and steady institutional investor activity reveal a competitive landscape where buyers and investors alike are adapting to market conditions. As California’s housing market navigates economic headwinds, these insights provide valuable context for understanding the pressures and possibilities shaping the state’s real estate future.
Written by: Jennifer Von Pohlmann