California Housing Market Vitality

Market Rank

thirty six

California metro area house prices are forecasted to outperform the national market over the next twelve months. Currently, the market is underperforming the overall U.S. market. Compared to 12-months ago, California’s housing market has strengthened. Current local economic conditions support an estimated 9.4% increase in house prices over the next twelve months. Based on the housing market vitality of the twenty nine metro housing markets which comprise it, California’s housing market ranks thirty sixth amongst all states and D.C. The three-month outlook is negative.

Housing Market Vitality

Housing Market Vitality summarizes the impact of economic conditions on house prices. A value of 100 corresponds to conditions supporting current price appreciation; values less than 100 correspond to a dampening effect and values greater than 100 indicate a positive impact on house prices. A housing market vitality value can be interpreted as a growth rate. Hence, a reading of 105.8 can be interpreted as a 5.8% annualized increase in house prices.

California Metro Housing Markets

California is comprised of twenty nine metro housing markets that account for nearly 98% of the state’s population. The Golden State metro housing markets are unique in their demographics and local economies and exhibit trends that are distinct from the national and state narrative. Each metro market presents its own unique opportunity.

METRO AREA SITUATION OUTLOOK US METRO RANK (/402)
Anaheim-Santa Ana-Irvine, CA Underperforming Negative 294
Bakersfield, CA Outperforming Positive 64
Chico, CA Underperforming Negative 275
El Centro, CA Outperforming Negative 188
Fresno, CA Outperforming Positive 104
Hanford-Corcoran, CA Outperforming Positive 46
Los Angeles-Long Beach-Glendale, CA Underperforming Neutral 173
Madera, CA Outperforming Positive 102
Merced, CA Underperforming Positive 169
Modesto, CA Outperforming Positive 1
Napa, CA Underperforming Negative 350
Oakland-Hayward-Berkeley, CA Underperforming Neutral 231
Oxnard-Thousand Oaks-Ventura, CA Underperforming Neutral 222
Redding, CA Outperforming Positive 75
Riverside-San Bernardino-Ontario, CA Outperforming Positive 43
Sacramento–Roseville–Arden-Arcade, CA Outperforming Positive 56
Salinas, CA Underperforming Positive 175
San Diego-Carlsbad, CA Tracking Positive 97
San Francisco-Redwood City-South San Francisco, CA Underperforming Negative 402
San Jose-Sunnyvale-Santa Clara, CA Underperforming Negative 394
San Luis Obispo-Paso Robles-Arroyo Grande, CA Underperforming Negative 307
San Rafael, CA Underperforming Negative 398
Santa Cruz-Watsonville, CA Underperforming Negative 384
Santa Maria-Santa Barbara, CA Underperforming Neutral 307
Santa Rosa, CA Underperforming Negative 356
Stockton-Lodi, CA Tracking Positive 119
Vallejo-Fairfield, CA Underperforming Positive 181
Visalia-Porterville, CA Outperforming Positive 122
Yuba City, CA Outperforming Positive 33

Industry Specialization

California’s state economy is specialized in Information, Pro Bus svcs, and Leisure Hosp. Mining, Edu Health svcs, and Trade Trans Util industry sectors are less important to the state economy compared to the national economy.

Industry specialization helps explain the differing impact of industry trends on local economies in contrast to industry composition which describes the structure of the economy. A Specialization Index value greater than 100 corresponds to the sector having a greater share of the state economy than it does of the national economy. Sectors with a Specialization Index greater than 120 characterize the local economy.

Demographics

Compared to the U.S., there is a higher incidence of poverty amongst California residents and they have less purchasing power. There are fewer high school graduates and a smaller proportion of the population is college educated. California’s population is comparatively more diverse than the overall U.S. population.

A Demographics Index value greater than 100 corresponds to the factor being more intense in the state versus the national average. Characteristics of the local population is a longer-term factor that influences the housing market.

Updated July 30, 2021 with data through June 2021