The Golden State’s housing market could be a sure bet in 2024
A new ranking of the top 10 cities for growth includes five Southern California metros that could see double-digit sales growth next year.
Key points:
- A Realtor.com forecast ranked the markets “poised to see the strongest combined increase in home sales and listing prices” in 2024.
- While Toledo, Ohio, was the No. 1 city for growth, five Southern California cities made it into the top 10.
- Even pricier markets will “see double-digit sales growth as sales start to rebound,” Realtor.com researchers said.
More homebuyers could be California Dreamin' next year, according to a new forecast from Realtor.com. While all the leaves are brown and the skies are gray in much of the country's housing market, five of the top 10 cities projected to see strong growth in 2024 are in the Golden State.
The top metros are those which are "poised to see the strongest combined increase in home sales and listing prices," Realtor.com researchers said, meaning they will have the most upside in the coming years for homeowners. For many buyers, however — especially in California, where affordability remains extremely challenging — high home prices could still be a barrier to homeownership.
The California markets to watch in 2024
The five California markets to make the top 10 are all in the SoCal region: Oxnard, San Diego, Riverside, Bakersfield and Los Angeles.
With a current median home price of $1.15 million, Los Angeles is by far the priciest city on the list. Still, Realtor.com expects LA home sales to improve by 9.2% and prices to increase by 3.5% next year, for a combined sales and price change of 12.7%.
In Oxnard, Realtor forecasts sales to improve by 18% and prices to increase by 3.3% over 2023. The only city that has a bigger upside is Toledo, Ohio, where a 14% bump in sales and price gains of 8.3% are expected. But there's a much wider gulf in home prices between Toledo's $200,000 — which is well below the national median — and Oxnard's $1.03 million.
"Now that we're seeing the beginning of an affordability turnaround, home buyers are still looking for markets where they can capitalize on lower prices," Realtor.com Chief Economist Danielle Hale said in the report. "Even in some of the more expensive markets, we'll see double-digit sales growth as sales start to rebound from their historic lows, helped by mortgage rates which are expected to finally relent.
The end of an exodus from the Golden State?
One of the prevailing housing narratives during the pandemic was that of people fleeing California. And there's real data to back that up. According to a Stanford report on California demographics, the state witnessed a net loss in domestic migration between July 2021 and July 2022 (though foreign immigration tripled during the same period).
But Realtor.com sees a big opportunity in 2024 for prospective buyers who have either been on the fence or who have yet to enter the market, especially if borrowing costs were to soften. However, the report noted that the five California markets that made their list will perform better than the state as a whole next year.
"While sales will be higher than in 2023, sales in the top five California markets are still 20%-35% lower than in a typical year before the pandemic in 2017-2019," Realtor.com researchers wrote. "And these markets are more sensitive to shifts with mortgage-rate changes, given that only 31.6% of homeowners in these Southern California markets don't have a mortgage."