There is little doubt that the California housing market forecast is projected to be positive.  CAR conducted a survey and found the following opinions generally held by most of the experts:

• Buyers, sellers, and agents agreed that home prices will likely remain on their upward trend in the short term.
• 60% of agents believe that prices will rise in the coming weeks.
• 46% think that sales and listings will grow in the coming weeks.
• An average of 675 new listings per day was reported in the week of January 24-30, a growth of 4.1%
• Agents don’t see huge changes ahead in the coming months.
• Zillow predicts that home prices will rise by 10.6% in the next 12 months.
• For repeat buyers there is an increasing desire for a larger second home.
• 35% of buyers are opting for a property with more rooms.
• 37% of buyers are opting to live in a suburb rather than a city.
• 26% of buyers are opting to live in rural areas rather than cities or suburbs.

As of January 31, the California real estate statistics read as follows:

• Median price rose 27% YTY, the largest gain in nearly 7 years
• Median time on the market:  12 days
• Active listings dropped sharply from last year down 53.4%
• January saw the highest sales level since 2009 at 484,730 units (up 22.5%)
• All major regions’ median prices continued to increase from last year by double digits.

Every indicator points to a robust real estate market for California into the rest of 2021.  So if you’ve considered moving up, moving down, moving out of town, now is the time to sell!  Marketing is hot and there are Buyers out there who want to buy your home.

Best, Broker – The Guy in the White Hat

With home values appreciating by 10% in 2020, there has been some speculation that we might be in a housing bubble such as we were a decade ago.  California residents, fear not!  Here are some incredibly significant facts that this time is not like the past:

• Housing supply is extremely limited:  If supply is low, prices naturally increase.  Normal months of inventory for the market is 6 months.  Between 2006-2008 the supply of inventory was just over 5-11 months.  Today it stands at 1.9 months – an historic low.
• Housing demand is real:  In the mid-2000s, people bought houses based on an unrealistic belief that housing values would continue to escalate.  The mortgage industry fed into this craziness by making mortgage money available to just about anyone.  In the present real estate market, demand is real, not fabricated.  The health challenge has defined the meaning of “home” and people are re-evaluating their current home needs leading many to sell and move to larger properties.
• This time households have plenty of equity:  In the mid-2000s, people were using their homes as ATM machines, leaving many homeowners with little or no equity in their homes at a critical time.  As prices began to drop, some homeowners found themselves in a negative equity situation.  Many defaulted which led to a flood of foreclosures.  Today according to Census Bureau data, more than 56.7% of all homes in this country have a minimum of 50% equity.

What can we take from this examination of the present housing market?  With California housing supply at an historic low, demand high and ample equity, homeowners living in pretty much every county of California do not have to fear that we will repeat the mistakes of the last decade.  According to the experts, the real estate market is not going to experience a repeat of the 2008 fiasco.

The growth in prices for homes in these major metros has been astonishing compared to last December.  Homeowners who held onto their homes have been rewarded with hefty increases in sold prices.  Still, the supply of pending sales is down.  Let’s look at some of the major metro areas’ statistics:

• Metro LA:  In December, average house prices fell 0.8% to $625,250 (still 13.7% higher than December 2019.   Home sales rose 14.3% from last month.
• LA County: Average house prices rose 6.8% to $709,500 from $664,160.  Home sales were up 30.5% from December 2019.
• SF Bay Area:  December average home prices were up 53.8% from December 2019 at $1,058,000.  Sales of houses rose 40.2% from December 2019.
• San Francisco: Average house prices fell 6.9% to $1,581,000.  Sales increased 53.8%n from December 2019.
• San Diego:  Home prices fell to a new median price of $730,000.  Sales rose 30.3% from December 2019.
• Orange County:  Home prices rose 2.2% to $950,000.  Sales rose 25.1% from December 2019.
• Sacramento:  Home prices fell 0.1% from the previous month to an average of $442,250.  Sales rose 1.6% from the last month.
• Monterey:  Home prices fell 0.1% from the previous month to an average of $785,000.  Sales rose by 1.6% from last month.

Pending sales leveled off from the rampant pace in late summer, but overall, there was a significant increase in home values and a continued lack of inventory.

If you are looking to invest in real estate this year – as a home buyer or landlord – get ahead of the race by consulting a mortgage broker to see what you can afford and secure pre-approval.  If you want faster financing or don’t qualify for a conventional loan, Sun Pacific Mortgage is here for you with private financing.  Give us a call at 707-523-2099 to learn about our many lending programs that can help your dream of homeownership come true.