The housing market is ever changing in California, and a recent California Real Estate article spotlighted some of the biggest issues. 2016 marked some interesting trends in real estate and exciting things seem to be in store for the future.
California continues to experience a shortage of inventory. While the percentage of homeowners who think now is a good time to sell has increased over the year before, the available inventory is still a bit tight. According to a recent Redfin survey, only 52% of homeowners are ready to put their homes on the market. Low inventory makes it a seller’s market, but sellers ultimately need to buy a replacement home, putting themselves in competition with everyone else vying for real estate.
We may have reached a point in the housing market where homeowners who have been waiting for the right time to sell will commit to doing so, expanding the available inventory.
Across the country, home ownership in general has hit a 50-year low. According to the Mortgage Bankers Association, California’s rate of 54% home ownership is even lower than that of the national average of 63%. The biggest hurdle for Californians is housing affordability. Three of the most expensive markets in the country are in the Golden State: San Jose, San Francisco and the Anaheim-Santa Ana area. With a statewide median price of $516,000 many first time home buyers find themselves priced out of the market and relegated to renting.
Contrary to predictions, mortgage rates have remained low and are continuing to drop. This created a wave of refinancing from existing homeowners and an increase in home purchases in areas where it was found more affordable to buy than to rent.
And people are leaving… Last year California’s steep home prices (as well as other factors) saw the largest exodus since 2011. The silver lining? It is creating more inventory available to those buyers who want to stay in California.
What will 2017 bring? How will it shape the Southern California real estate market?