Real Estate Market Trends in California for 2024

Unique Trends and Insights to Watch

In addition to the major factors above, several emerging real estate trends in California are worth monitoring in 2024:

  • The rise of iBuyers like Opendoor and Zillow purchasing homes directly from sellers.
  • Ongoing impacts of remote work on housing and office space demand.
  • Government programs aimed at increasing affordable housing construction statewide.
  • Climate change and sustainability initiatives influencing real estate development and investing.

The California housing market saw a dramatic shift in 2022 as spiking mortgage rates rapidly cooled demand. With rates projected to moderate in 2024, we could see a rebound, but affordability will remain a major challenge.

Home Prices

After rapid appreciation since 2020, expect home price growth in California to continue slowing in 2024. More listings coming onto the market combined with higher mortgage rates will temper bidding wars. Median prices should rise in the low single digits statewide. The Bay Area and coastal metros will likely see minimal price gains while inland California markets could appreciate faster.

Sales Volume

Following 2021’s frenzied pace, existing home sales dropped over 20% across California in 2022. Sales activity should stabilize and remain softer through 2024 as buyers adjust to higher rates. The state’s persistent housing shortage and strong economy will keep sales levels moderately healthy.

Inventory Levels

Inventory improved slightly in 2022 but remained near all-time lows. California’s supply crunch won’t improve overnight. However, more existing homeowners may list as part of a lifestyle change, boosting inventory modestly. New construction will also add limited supply, primarily focused on the luxury end.


After deteriorating sharply during the pandemic, housing affordability remains a major challenge across California. California’s median home price remains over 8X higher than the national median while incomes trail the nation. Increased mortgage rates further reduce purchasing power for buyers. Prices should moderate somewhat, but higher borrowing costs will limit improvement to affordability. Down payments and income requirements will continue pricing many buyers out.

Regional Variations

The San Francisco Bay Area and coastal urban markets like Los Angeles and San Diego, CA saw the fastest home price growth in 2021-2022. Prices remain highest in these regions, and they are likely to flatten out in 2024. Inland markets should see slightly stronger demand from remote workers and buyers seeking affordability. The Central Valley continues offering the state’s most affordable options for buyers, though supply is extremely tight.

Commercial real estate markets face headwinds from economic uncertainty and evolving space usage needs. However, pockets of strength persist, and opportunities will emerge for savvy investors.

Office Space

Office vacancy rates climbed across California in 2022 as companies delayed leasing decisions. With remote and hybrid work arrangements persisting, office demand will remain muted in 2024. Sublease space continues flooding the market too. Tenants seeking flexibility will have bargaining power on shorter leases with concessions. Expect Class A space and sought-after submarkets to outperform.

Retail Space

California’s retail real estate faces evolving headwinds. While top-tier malls and open-air centers remain desirable, vacancies are elevated at aging shopping centers. Retailers continue rightsizing footprints, accelerating store closures. Still, necessity-based retail and restaurants in high-traffic locations will draw tenant demand. Adaptive reuse projects breathing new life into obsolete malls also provide opportunities.

Industrial Space

Demand for logistics and distribution space remains robust, keeping industrial vacancies extremely low across California. E-commerce and supply chain problems are driving leasing volume as tenants compete for both warehouse and last-mile space. While deliveries of new space pick up in 2024, competition will remain fierce, especially for modern Class A facilities.

Multifamily Housing

The state’s housing shortage bodes well for continued apartment demand. However, growth in rental rates is slowing from 2020-2022’s rapid pace as deliveries pick up. Investors still covet multifamily housing, viewing rents as more stable than office and retail income streams. Concessions may increase in some metros to attract renters. Overall fundamentals remain favorable relative to commercial real estate alternatives.


California’s hotel sector made strong progress rebounding from COVID slowdowns, aided by strong leisure and group travel. Room rates climbed back near 2019 levels in many markets. However, economic uncertainty may dampen corporate travel in 2024. The return of international visitors will help major gateway markets like San Francisco and Los Angeles. New lifestyle hotel concepts also continue drawing investor interest.

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