California real estate reaches unprecedented price levels as sales climb

Home prices hit another peak

California’s housing market gave buyers another jolt in May, as the statewide median price climbed to a record $930,260 while sales improved from last year this spring.

The new numbers show a market still short on supply, with higher-priced homes pulling the median upward while many middle-income buyers face tight budgets and fewer choices today.

Sales rose from last year

Existing single-family home sales reached an annualized pace of 268,810 in May, up 5.1% from May 2025, according to California Association of Realtors data.

The gain marked the second straight yearly increase, though sales dipped from April and remained below the 300,000-unit benchmark for the 44th straight month across California, despite high prices and borrowing costs.

The state median set a record

California’s median home price reached $930,260 in May, breaking a record for the second straight month and moving above $900,000 again in 2026.

Prices rose 2.3% from April and 3.1% from May 2025, showing how higher-end sales and limited listings kept pressure on buyers across the state during the busy spring buying season this year.

Bay Area prices stayed high

The San Francisco Bay Area remained one of California’s most expensive markets, with the median single-family home price reaching $1.45 million in May.

That was up 3.6% from April and 3.6% from last year, showing that competition stayed firm even as some counties saw price drops nearby and buyers chased limited homes across the region.

San Francisco posted a jump

San Francisco County recorded one of the sharpest price gains in the Bay Area, with its median home price reaching $2.2 million in May.

That figure was up 22.2% from May 2025, though median prices can shift when more expensive homes make up a larger share of sales in one month for that county’s sales mix.

San Mateo remained expensive

San Mateo County stayed near the top of California’s price ladder, with the median single-family home price reaching $2.401 million in May.

The county posted a 9.1% yearly price gain, even as sales slipped slightly from last year, showing how limited supply can keep prices elevated for buyers in one of the region’s priciest markets.

Alameda saw steady growth

Alameda County’s median single-family home price reached $1.4 million in May, showing the East Bay’s continued pressure despite affordability concerns for many buyers in neighborhoods close to jobs, schools, transit, and ferries.

Prices there rose 2.6% from May 2025, while sales increased 1.6%, pointing to a market where buyer demand remained active but still selective.

Some counties cooled slightly

Not every Bay Area county moved higher. Marin County’s median price fell 4% from last year, while Santa Clara County dropped 3.3%.

Those declines show the market is not moving in one direction everywhere, even as the regional median rose and several nearby counties stayed very expensive in May during the same reporting period overall.

Limited supply lifted prices

C.A.R. economists said housing supply stayed constrained as many would-be sellers held onto homes instead of trading into today’s higher mortgage rates.

That lock-in effect leaves fewer listings for buyers, which can intensify bidding and push prices higher when demand improves in costly markets across California. When move-up options remain expensive, many owners may wait longer before selling.

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Million-dollar sales shaped the mix

California’s million-dollar home market played a major role in the statewide record, as higher-priced properties took a larger share of total transactions in May.

C.A.R. reported that homes priced between $1 million and $2 million rose 8.2% from last year, while sales above $2 million rose 8.5%, as buyers with more cash stayed active there.

Middle-income buyers faced strain

The same report showed sales in the $500,000 to $1 million range declined 3.4% from a year earlier, highlighting affordability pressure.

That gap matters because many families search in that range, yet high prices, limited listings, and mortgage costs can make each offer harder to fit into monthly budgets, especially in California’s larger metro areas.

Mortgage rates still mattered

The average 30-year fixed mortgage rate was 6.44% in May, below last year’s 6.82% average but still high for many buyers.

Even small rate moves can change monthly payments, so buyers watching California prices may also watch financing costs before deciding whether to bid on a home, especially in high-priced coastal counties where budgets stretch quickly.

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What buyers should watch next?

California’s record prices show how tight supply and high-end sales can lift the market even when many households feel priced out.

The next test is whether more listings, steadier mortgage rates, and returning buyers keep sales climbing or push prices higher in the summer market across the state as more summer listings reach the market.

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What do you think California’s record real estate prices mean for buyers trying to enter the market? Share your thoughts in the comments.

This slideshow was made with AI assistance and human editing.

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