A year ago, no one would have predicted the end of 2024 would see home prices reaching record highs. Yet, here we are, and it seems like next year may echo the same unsettling trend. The housing market is heating up once more, with figures showing incredible increases across the board, especially in Southern California.
Southern California, notorious for its booming real estate market, is tuning up for another big wave. According to real estate data company CoreLogic, San Bernardino County—a giant area known as the largest county in America—has seen its median home price reach $525,000 as of November 2024. This surge marks more than 6% rise from last year and showcases just how quickly the area's housing market can shift. Not too long ago, this figure was reported to be $499,000 just back in September!
To add some perspective, let’s rewind to November 2016 when the median home price for San Bernardino County was merely $272,000. That number reflects nearly a staggering 93% increase over just eight years! Similarly, Riverside County, home to Palm Springs and its proximity to the city of Riverside, shows similar growth—its median home price shot up 5.4% year-over-year, now sitting at over $600,000 compared to just $320,000 eight years ago.
Now, as home prices rise, many are wondering where affordable living can still be found. San Bernardino County, once considered one of the more affordable areas, is now catching up with the pricier coastal regions. How did this happen? Population shifts have played a significant role. An influx of people has taken place as individuals flee the expensive coastal cities, drawn by lower prices and the promise of more land. The Inland Empire has transformed since it was unfairly depicted as just dusty backwaters compared to sprawling places like Los Angeles and Orange County.
Just look at Victorville, whose $425,000 homes have become appealing for buyers chasing lower costs. But it gets complicated. Higher population numbers don't just mean more buyers. The added residents have lured investors eager to capitalize on this growing market, leading to increased competition and, unfortunately, driving home prices even higher. The impact is felt indirectly, too, with rising rents and squeezed affordability—leaving potential homeowners and renters with the heaviest weights on their shoulders.
There are also environmental concerns linked to this population boom and homebuilding frenzy. With growth, especially at the edges of urban development, there’s potential for pollution increase and related health concerns to bubble up. The region’s charm is often overshadowed by troubling realities, including the ever-present threat of wildfires exacerbated by climate shifts like drought conditions.
A telling sign of the times is how these trends diverge within neighborhoods. Not every corner of the Inland Empire is created equal. For example, Redlands—a charming mid-sized exurb—boasts homes typically selling for over $100,000 above the county’s median price. Meanwhile, just over the hills, towns closer to the prey of development face tougher choices and higher stakes.
Meanwhile, the housing market is not only influenced by local dynamics; national trends play their part. From fluctuated interest rates to consumer demand and investor behavior, the intersecting forces make forecasting challenging at best. Higher inflation typically impacts mortgage rates. Although, as experts denote, even with rising rates, homebuyer demand seems relentless.
But don't let the dire prices fool you. The market is expected to remain resilient. Economists believe multiple factors could keep the momentum alive, especially if job growth and wage increases come to fruition, balanced against potential economic hurdles. All this could compound buyer optimism enough to keep the wheels of the housing market turning.
While predictions about the housing market are rarely set in stone, those watching the trends continue to speculate on what 2025 will bring. For many potential buyers or renters, the situation may seem ever more dire as prices hit new heights without clear signs of plateauing.
It becomes clear too, more than just financial strain is at play here. Demand is not just driven by local residents but by investors seeking to profit off this expansive growth, shaping dynamics at play here. It smacks of modern gold rush fervor, but experiencing the consequences can feel like squeezing water from stone for those needing reasonable affordable options.
All told, it poses significant questions going forward: Will the idyll of suburban living become restricted to only the well-off, leaving average Americans pushed out? Can the housing market develop mechanisms to allow more entry points for first-time buyers? And what does this mean for the diversity of communities we now see?
For many, the dream of owning property feels as elusive as ever, as record highs set heartbeats racing and bank accounts shrinking. Addressing these growing concerns involves not just individual decisions but broader community and governmental actions to chart pathways for success—ones ensuring all Californians can call their house not just shelter, but home.