AI Boom ROCKS California Housing Market (Highest Prices EVER)

追加: 2026-06-03

[00:00:00]Well, the AI boom has made impact with the California housing market, driving the median price of a home in California to an all-time high. But digging into the data, we see that the California housing market is not a monolith.

[00:00:15]Pricing and competitiveness depend on what region you're in in California, what price bracket you're shopping in, even what side of the San Francisco Bay you live on. So, in this video, I'm digging deep into the data, looking at the California Association of Realtors most recent print, as well as some local municipal data from Redfin to determine exactly what's happening in California and not just statewide, but regionally.

[00:00:43]Specifically, we'll be looking at Southern California, the Central Coast, and the Bay Area as we determine which California home buyers are facing the worst and facing the best summer buying season. I'm John Schwarz, your 1% commission California realtor. Look, it's very expensive to buy a house in California. The only surefire way that I know to reduce that price is to pay your agent less. Learn more about getting quality representation from a 1% commission agent by visiting my website.com.

[00:01:13]That's www.jsch.com.

[00:01:18]Now, let's get into the video. And we're looking at the California Association of Realtors most recent print for the state of California. reflecting April 2026 home prices. Of course, the big story is that the median sale price of a home in California has reached a new all-time high. But before we discuss pricing, we have to talk about sales volume, the number of homes being sold, because that is the biggest lever affecting the housing market since the pandemic really shook everything up. In April 2026, we saw a annualized uh sales volume of 275,000 homes being sold in California. That would be the estimate for the year based on April's numbers. That's up 4.1% year-over-year. That's great news. But as you can see, the level of sales in California still is not at its preandemic norms. Back then, we were seeing about 400,000 homes being sold per year. We're still down at 275. That said, our 4.1% growth this month was great. This was the first year-over-year gains of 2026. I think most of us housing professionals spent the year worrying that the housing recovery uh which to us means an increase in volume getting back to prepandemic norms had stalled out for the year. Well, it looks like we have finally made some growth for the year. But if you look at the six uh month moving average, which is this dotted blue line, you can see that for most of the last year, we've been hovering around zero in terms of growth over the previous year. So yeah, the the the growth in sales this month was fantastic for the market, but we're still not out of the woods by a long shot. Now, when we dig down into what's happening regionally, things start to get interesting. Right now, we're looking at sales volume in Southern California. And as you can see, the year-over-year growth of sales volume in Southern California was hardly anything, 0.1%.

[00:03:12]So, SoCal is definitely not boosting this housing market. Moving on, now we're looking at sales volume in the Central Valley, which was up 1.6% year-over-year. Again, uh this is trailing behind the statewide average.

[00:03:26]Also, the central valley is clearly not what's supporting this housing market.

[00:03:31]Finally, let's take a look at the Bay Area where sales are up over last year by 5.5% beating the statewide average. And yeah, that is the effect of the AI boom. Sales are booming in the Bay Area. This graph here puts it all together. You can see that Southern California, where sales growth is an anemic.1% makes up 44% of the California market.

[00:03:55]The Central Valley and the San Francisco Bay area are each at 22%. So combined, the Central Valley and the San Francisco Bay area equal the size of the SoCal market. Now, we know that the Central Valley is barely chugging along at 1.6% volume growth year-over-year. So, really, it's the San Francisco Bay area with its 5.5% sales growth that is pushing along basically the entire California housing market. When we look over here at the right at home sales growth by region, again, we see Southern California with its anemic 0.1% growth.

[00:04:31]Central Coast actually shrunk. Central Valley is just up 1.6%. Other counties 0.4%. We'll get to the far north in a second. And we have the San Francisco Bay area booming at 5.5% year-over-year growth. And when we look at these orange lines, that's month-to-month growth. Now, growth from March to April is always going to be positive because the spring season is starting up. So, we expect big gains. In Southern California, we had an 8% month-over-month gain. Central Coast 3 and 12%, Central Valley, 10%, other counties, 10%. But look at this. In the Bay Area, from March to April, we had an 18.8% growth in sales. Yeah, that's the AI boom. And just to point it out, the far north is blisteringly hot now with a 24.6% uh growth year-over-year in sales. But keep in mind, the far north only makes up 3% of the housing market in California. So, yeah, that something is happening in the far north, but it's not really having as big a statewide effect as what's happening in the San Francisco Bay area. Now, the story gets even more interesting when we look at sales by price bracket. Can you see what the uh what the headline is here? Yeah. It's that the largest selling price bracket in terms of year-over-year growth is the $2 million plus bracket. 1 million to $2 million homes uh grow uh growth grew by 3%. Uh 750,000 to a million actually shrunk. 500,000 to 750,000 grew by 4%.

[00:06:04]400 to 499 grew by 5%. We had shrinkage in the three to fours and growth in the 0 to $300,000 range. But the but the big headline is that really expensive homes in California are pushing forward the market. In fact, we can see when we look at market share by price segment, the $1 million plus share of the California market grew by 1%. Whereas homes that sold for less than a million dollars shrunk by 1%. In fact, the share of million-doll home sales reached its highest level on record with 33.4% of homes in California selling for $1 million or more. And homes under $500,000 in California, taking up just 22.1% of the California market share. And this is a complete inversion of what we we were used to pre- pandemic when million-dollar homes took up about 20% a little bit less of the California market and homes that cost less than a half million or almost half of the California housing market. And I have to say now that we're, you know, six years past the outbreak of COVID, it's pretty clear that this inversion is not just a pandemic phase. That California home ownership has really become a luxury of the wealthy. And I hate to say it because I'm a realtor myself, but one of the reasons why California homes are so expensive is because realtors in California get paid a ton of money to help you buy or sell them. I'm trying to put an end to that. I'm trying to help California home buyers afford California homes. I charge a simple 1% commission while offering all the services and attention that you want as a California home buyer to make sure you make it through the process successfully. Learn more about getting great personalized service with a 1% commission agent at my website.com.

[00:08:00]That's www.jsch.com.

[00:08:05]Now, let's talk about pricing. All right, we've made it to the big headline. California median home price reached a new record high in April 2026 at $889,190.

[00:08:20]That's us way up here. That's higher than our pandemic peak. California homes have never been more expensive is one way to spin this factoid. But what we've already seen really informs how we understand this number. There have been a lot of sales in San Francisco. there have been a lot of sales in the $2 million plus range. And so, of course, that's going to pull up the median home price. Just mathematically, the way the median metric works, that's how that happens. The question is, if you're looking to buy a home for $800,000, a million, $1.6 million, have the homes that you're looking to buy gotten more expensive? And fortunately, we have data that can help answer that question. Now, we're looking at median price growth by percentile. And as you can see, the highest percentile saw only 0.7% price growth. The 60 to 80th percentiles in terms of home prices saw the most price growth at 4.3%.

[00:09:18]Now, the California Association of Realtors doesn't exactly define the price points of these percentiles.

[00:09:24]However, we know that the million-doll plus market makes up a little more than 40% of the California home market. So, we can kind of draw a dotted line right here and call this the $1 million mark.

[00:09:34]So, if you're looking to buy a home in California for less than a million dollars, you've actually seen lower rates of price appreciation, 3% for the 40th to 60th percentile, 2.1% for the 20th to 40th percentile, and 0.7% for the lowest uh quartile, that's the 0 to 20th percentile. And also, it's worth noting that even though more of these $2 million plus homes have sold, they haven't been getting significantly more expensive. Price growth in the 80th to 100th percentile is only 0.7%. And when you break that down further, you see that most of the growth in that top 20% is in the 80 to 85th percentile.

[00:10:15]Though, it's interesting that the 96th to 100th percentile, and these are the very most expensive homes in California, did see 5.9% price growth. And and guys, this this, you know, this very top of the market, we're talking about the $40 million mansions in Beverly Hills. We're talking about the homes that record producers, actors, football players, Arab money are buying. The share of homes sold above asking price is on the rise and on par with a year ago. Right now in California, 41.2% of homes sell above asking price. That's exactly where we were one year ago. Fortunately, that's far below our pandemic peak of 72.9%.

[00:10:54]I like to share this slide as a reality check for California home buyers. Just as a reminder, over 40% of homes sell above asking price. So, if you're out there shopping for a home and you have the attitude of I will not pay above asking price, you may have to soften that attitude. Now, looking at where homes are selling above asking price gets interesting. Now we're looking at homes sold above asking price broken down by county. Six California counties had a majority of homes sell above asking price. Those counties are all in the Bay Area. San Francisco, Alama, Sano, Santa Clara, Marin, and Contra Costa. San Francisco amazingly had more than 80% of homes sell above asking price. This really points to how active and competitive the Bay Area is, and we know who the culprit is. It's all that AI money. By contrast, you can see that Southern California is much less competitive by finding its big counties on the map. Here's Los Angeles County, San Diego. Here's Orange County, San Bernardino, and Riverside. Much more evenly distributed on this graph. We're looking at the most recent monthly data from Red Fin for the San Francisco metro area. And what we see is that pricing is on a tear. A median home in the San Francisco metro area at the end of April cost $1.7 million. That's up from $1.4 million at the end of January. And we can see that San Francisco has had just some blockbuster months. In April, prices rose year-over-year 10.7%.

[00:12:32]And in March, San Francisco saw year-over-year price gains of 13.4%.

[00:12:38]So, something wild is happening in San Francisco, and it's been happening pretty recently, and we know what that wild thing is. It's the AI boom. If we travel just 50 minutes south through the Silicon Valley, we get to San Jose, where home prices are high, but not absurd like we're seeing in San Francisco. Right now, the median price of a home in San Jose is 1.645 million.

[00:13:02]That's lower than the peak set a couple years ago, just higher than the pandemic peak of 1.6. $6 million. So the story in San Jose is much more moderated than what we're getting in San Francisco.

[00:13:13]Meanwhile, if we go just across the bay to Oakland, we see a completely different story. Pricing is down from its pandemic peak. In April, the median price of a home in Oakland was $947,000.

[00:13:26]That's down about 13% from the pandemic peak of $1,85,000.

[00:13:32]And we can see in the graph of year-over-year price change that Oakland took quite a hit after the pandemic.

[00:13:38]Prices climbed up, but they have since been on their way down again. Now, there's a pretty straightforward explanation for this. If we look at home sales, we can see that the level of sales in Oakland is below its prepandemic norms. Obviously, home sales grew in that post-pandemic period when people were fleeing cities like San Francisco, moving across the bay to a less dense city like Oakland. But now that we're in this post-pandemic period, home sales in Oakland just haven't reached their prepandemic norms.

[00:14:10]Meanwhile, and the data shows us this, San Francisco's back. When we look at the level of home sales, which was 1,3 last month, we see that's right on par with where we were in our prepandemic norms. Home sales in San Francisco shot up when rates dropped and then absolutely plummeted when rates began to climb and people started getting sick of the pandemic. But since then, we've had positive year overyear home sales growth in San Francisco. So, the Bay Area is very much a tale of two towns. You could say that the entire state is a tale of two markets. The median market and the high-end market. The AI boom is pushing San Francisco and pushing the high-end.

[00:14:52]Fortunately, for the rest of the market, things aren't as extreme as the headlines suggest. Also, fortunately, there's a new California program that can allow you to buy a home with no out-of- pocket expense, no down payment, and no closing costs. I'm taking a deep dive into that program next week, so stay tuned.