Let’s Check In With The California Real Estate Market – OutKick

After nearly two years of working here at OutKick, I tend to think I know what will get you guys to click on a post: Instagram models, California nonsense and real estate prices. Let’s face it, these vices never go out of style, and I’m going right down into that well again today because we have to address what’s STILL going on with the California real estate bubble.

Here we have a 5-bedroom, two-bathroom 2,260 sq. ft. house built in 1920 that sold this week in Mill Valley, CA for $1,581,000 OVER the asking price.

Take a look at the listing photos. We’re talking a nice California home with a yard with a lemon tree. We’re talking a nice yard to roll around in the grass. The front porch is nice. The master bathroom is updated. The rooms are basic. The kitchen is nice, but nothing extravagant.

HOW IN THEEE HELL did someone pay $4,576,000 to live in this house? Someone explain this to me. I don’t care if Sycamore Ave. is the best damn street in America and that you can walk to the French creperie around the block. I took one look at the Google StreetMap for this place, and I was out. I don’t care if I had 5,000 Bitcoins locked up in my super-secret virtual wallet and they were burning a hole in my virtual pocket.

Look at this street view. Complete chaos for parking. Is that even a two-way street? You’ll never guess where the nearest Costco is located. That’s right, you have to drive into San Francisco to go get a 24-pack of butt wipes. If there’s good news, it’s that Whole Foods is .8 miles down the road for those $300 grocery runs.

I have $1,000 that these people don’t do garage beers and most likely don’t even talk to each other. Patio Busch Lights? Forget it. So how does THIS end up selling for $4.5 million?

According to February housing data, the highest-priced market is in Santa Maria, CA where the median listing price of all homes is at $1.625 million, Realtor.com reports. Why? The lack of listings.

Prices are skyrocketing, according to the listing site, because of a shortage of 5.8 million single-family homes.

“The shortage of inventory has led to a fast pace of sales, with buyers snapping up properties as soon as they hit the market,” says George Ratiu, a Realtor.com economist. “Moreover, the surge in mortgage rates in the first six weeks of the year further prompted buyers to find a home before rates move even higher. These factors have pushed median prices to record highs, not only in the hottest markets but across the entire country.”

Crazy California real estate prices

So where are these hottest housing markets? Realtor’s data shows that it’s not just California and across the south that are on fire. Look at Fort Wayne, IN coming in at No. 13.

Hottest Metros Hotness Rank Hotness Rank YoY Median Listing Price
Manchester, NH 1 6 $439,900
Santa Cruz, CA 2 12 $1,243,250
Raleigh, NC 3 46 $430,000
Springfield, MA 4 81 $317,250
Topeka, KS 5 6 $184,950
Rochester, NY 6 9 $225,000
Boulder, CO 7 115 $851,742
Portland, ME 8 36 $522,000
Salinas, CA 9 58 $909,000
Vallejo, CA 10 -6 $593,500
Burlington, NC 11 -10 $314,253
North Port, FL 12 118 $547,500
Fort Wayne, IN 13 17 $289,900
Columbia, MO 14 7 $337,500
Fort Collins, CO 15 45 $620,000
Concord, NH 16 -10 $464,900
Columbus, OH 17 6 $324,950
Santa Maria, CA 18 15 $1,625,000
Billings, MT 19 24 $567,450
Worcester, MA 20 35 $424,000

Now, I get the logical answers to how someone pays $4.5 million for a fairly basic 2,200 sq. ft. California house.

  1.  The buyer works in the area and makes a ton of money, so he/she/they bought it
  2.  The wife really loved the charm
  3.  It’s close to everything
  4.  OMG, they can walk to the little downtown area
  5.  They aren’t building more houses in that area

How are those house searches going in your areas? Are people blowing $1.5M to out-bid competitors? Let me know.

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