Because of the lack of inventory that still exists in California real estate markets, sellers remain in the driver’s seat. At the beginning of the pandemic, in early March, there were many who feared that this recession would trigger a repeat of the 2008 real estate debacle. By May, the real estate market surprised the economists by remaining stable, and even growing.
Looking at Southern California for the month of May, for example, there were 6 out of 7 counties that saw increases in the both the number of homes sold and in the average selling price. These counties included: LA, Orange, Riverside, San Bernardino, Santa Barbara, and San Diego. The only county to drop in average selling price, and only by 1.2%, was Ventura County.
Today, housing is truly driving the U.S. economy forward. Because there are so few homes to purchase right now prices are rising, a natural consequence of the “supply-and-demand” principle.
Chief Economist at realtor.com, Danielle Hale explains:
“People are surprised that prices are rising, not falling, because in the last recession home prices fell, the difference this time is the severe shortage of homes for sale…We are seeing bigger price increases with{a limited} number of homes…That is likely to lead to more competition and potentially multiple offers and bidding wars.”
We saw this happen in San Francisco during the month of July, where out of 163 single-family homes that sold, 89 sold over asking price. Another statistic stated that 42% of homeowners who made a purchase from the period January to May ended up in a bidding war.
The lesson here for prospective buyers this summer is to have your “ducks-in-row”. Hire a trusted local real estate expert to help you navigate those muddy waters out there. Additionally, get pre-approved for a mortgage.
If you find that you fall short qualifying for a conventional loan, or you need a loan fast (like in a week), give Sun Pacific Mortgage a call at 707-523-2099. We are a family owned business licensed and operating in California for over 32 years. Our private investors finance your real estate projects. We can get you qualified quickly and have funds in your hands with lightning speed, allowing you to make a solid offer on your real estate purchase or refinance. During these incredibly competitive days in the world of real estate, that is a significant step up when bidding on property.
