The California housing market took a breather in October as home sales and price gains declined as compared to the previous month but still recorded double-digit increases from a year ago. Despite a minor decline in the off-season, the consistent V-shaped recovery points to the housing strength for several more months. Intense demand has pushed home-value & sales growth to record levels in the California real estate market.
Mortgage rates are at record lows and builders are having trouble keeping up with the demand. After setting new record highs for four straight months, the median home price dipped on a month-to-month basis for the first time in five months, as reported by C.A.R. The median price for all homes sold in California fell only 0.2% to $711,300 down from September’s record high of $712,430.
Home sales dipped 1.0 percent from September, yet they are still 19.9% up from a year ago. The total sales in October climbed above the 400,000 level for the fourth straight month since the outbreak of the pandemic. C.A.R.’s monthly Consumer Housing Sentiment Index for November found that 59% of consumers believe it is a good time to sell their home, up 3% from last month and up 11% from last year.
Home-buyers across California’s biggest cities such as Los Angeles, San Jose, San Diego, Sacramento, and San Francisco are among the most active in purchasing real estate. These markets saw the biggest jump in new mortgages during the third quarter of 2020, according to research by ATTOM Data Solutions.
According to Zillow's data, the tight supply is reflected in many California markets. Listings in Los Angeles were down 17.5% as compared to last for the week ending November 14. In San Diego, they’re 33% lower while in Sacramento the listings dropped 37.2%. This points to the fact that that the California housing market will continue its recovery from the economic shock led by the coronavirus pandemic.
Home sales rose in all regions, with the Central Coast seeing the highest rises (28%). The Far North region sales jumped 19.4% compared to last year and even the San Francisco Bay Area saw sales rise almost 19% YoY.
Southern California sales jumped 17.5% YTY, the most for any month since June 2017 and the most for an October in 15 years. Double-digit sales gains were reported across the region, ranging from 13.1% in L.A. County to 29.3% in Orange Count to 21.2% in San Deigo.
Almost all regions set new record prices for the month of October. The San Francisco Bay Area had the second-largest price increase of 17%, followed by Southern California (15.4%), the Central Valley (14.7 %), and the Far North (12.8%). Santa Barbara saw the highest price growth (64% YoY). High end priced homes surged in sales.
Sales are expected to continue to improve for the remainder of 2020 and increase modestly again in 2021. Interest rates will remain low, giving buyers the purchasing power and home prices a boost. Buyer demand remains robust and that has already pushed California’s median price above $700,000. However, inventory is expected to remain a challenge that will keep sales growth in the single digits next year, as reported by C.A.R.
CAR's latest weekly California housing data (October 8- 16) shows that after remaining unseasonably strong through September, closed transactions continue to drop. An average of 770 daily closed transactions was reported in the past week. That is down 10.9% from the previous week and was led by double-digit declines in almost every part of the state.
Earlier in September 2020, the California housing market outperformed expectations, breaking record high median price for the fourth straight month, as reported by C.A.R. The lowest interest rates ever are bringing many motivated buyers into the market, which has led to the fastest sales growth in the California real estate market in a decade.
October's monthly housing report released by CAR showed that sales of existing, single-family home sales totaled 484,510 on a seasonally adjusted annualized rate, down 1.0 percent from September and up 19.9 percent from October 2019. Total sales climbed above the 400,000 level for the fourth straight month since the pandemic depressed the housing market in March. Year-to-date statewide home sales were down 1.3 percent in October.
This is an indication that buyers and sellers are beginning to realize that real estate deals can still be conducted despite the coronavirus pandemic. Sales of higher-priced properties are recovering faster than the rest of the market.
Housing affordability is improving in California due to lower mortgage rates combined with fewer new homes being constructed as the construction supply chain is impaired. This could lead to a more upward pull on California home prices. Unsold inventory has already reached the lowest level in nearly 16 years (2.0 months), and reduced construction activity means that is likely to continue—especially if buyers respond to lower rates.
California Housing Market Forecast 2021 (Updated)
What are the California real estate market predictions for 2020? California housing market is shaping up to continue the trend of the last few years as one of the hottest markets in the U.S. Let us look at the price trends recorded by Zillow over the past few years. From the beginning of the year 2012 to the end of 2019, the median home price in California appreciated by a massive 85.5%, from $305,000 to $566,000.
Currently, the median home value in California is $586,659. This value is seasonally adjusted to remove outliers and only includes the middle price-tier of homes. California home values have gone up 6.8% over the past year. The forecast for California’s housing market in 2021 is relatively favorable but things could change, given the seriousness of the pandemic.
The latest California real estate market forecast is that home prices will rise by 7.6% in the next twelve months (until August 2021).
The California Association of Realtors’ economic forecast this year looks at several scenarios in predicting whether home prices and sales will rise or fall in 2021. Low mortgage interest rates and pent-up demand will bolster California home sales in 2021, but economic uncertainty caused by the pandemic and continued supply shortage will limit sales growth, according to a housing and economic forecast
Here's a rundown of the forecast released by CAR on October 13, 2020.
- The CAR's forecast points towards a modest increase in existing single-family home sales of 3.3 percent next year to reach 392,510 units, up from the projected 2020 sales figure of 380,060.
- The 2020 figure is 4.5 percent lower compared with the pace of 397,960 homes sold in 2019. Sales have declined for the last three years.
- The California median home price is forecast to edge up 1.3 percent to $648,760 in 2021, following a projected 8.1 percent increase to $640,330 in 2020 from $592,450 in 2019.
- The median prices for existing houses, which make up two-thirds of the market, will rise a modest 1.3% next year, hitting $648,760.
- Low mortgage rates are expected to continue to fuel price growth. The average 2021 rate for a 30-year, fixed-rate mortgage will be 3.1% next year, down from 3.2% this year.
- C.A.R.’s forecast projects California’s 2021 nonfarm job growth rate at 0.5 percent, up from a projected loss of 12.7 percent in 2020. The state’s unemployment rate will dip to 9.0 percent in 2021 from this year's projected rate of 10.8 percent.
- The number of homes on the market was down 50% in 2020 and is expected to stay low in the coming year, creating a more upward push on home prices.
“The uncertainty about the pandemic, sluggish economic growth, a rise in foreclosures, and the volatility of the stock market are all unknown factors that could keep prices in check and prevent the statewide median price from rising too fast in the upcoming year,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young.
California Housing Forecast 2021: What Do We Think!
The most important thing to remember is that it is a health crisis – not an economic one. This pattern differs from a standard economic recession, which is a situation in which economic activity falls for 6-18 months and then recovers more slowly.
According to Aaron Kirman, host of CNBC’s Listing Impossible, “while the lasting effect of the coronavirus pandemic is still unknown when the pandemic eventually comes to an end, it’s going to be a buyers’ market.” The current housing inventory level is trending towards a balanced real estate market.
Due to a wave of job losses nationwide, this will create many distressed home sellers in the California real estate market, as well. Yet this is a buying opportunity for investors who have financing. The slowdown in what is normally a busy season will cause some realtors to go out of business.
Mortgage brokers and lenders will experience a boom in business since record low-interest rates cause a spike in mortgage refinances. We’ll also see a flurry of activity in the California real estate market as people pick up where they left off. For example, those who wanted to move before school starts in the fall aren’t going to wait another year to see what the housing market is going to do.
They’ll rush to showings and try to close on a property, as long as their personal financial situation is stable. We can expect the summer of 2021 to see record activity in the California housing market due to the standard spike in real estate transactions before the school year starts.
On top of this are the young graduates and couples that want to buy their own homes. Plus there will be long-term renters who recognize the opportunity that 3.1 percent 30-year mortgage rates represent, searching for homes once they can be pre-approved for a mortgage and visit properties.
There will be a slower economy for a while, but a number of ongoing trends aren’t going to reverse themselves. Millennials will want to move out of their parents’ homes and into their own. We can’t say there will be a coronavirus led baby boom, but many families having been stuck inside with their kids will decide they want a larger home, yard, or both.
We can talk about the many people who’ve moved out of California for other states. Yet the state continues to attract immigrants from around the world. And young native-born Americans flock here for the high paying jobs, as well. That isn’t going to change due to the virus. Tech giants expanding to Seattle or Portland haven’t relocated their development hubs out of Silicon Valley.
Furthermore, the demand for rentals in the California housing market remains strong. This is why we don’t expect to see a decline in monthly rents, though housing prices may fall significantly before shooting back up. A secondary effect of the coronavirus outbreak is that it has crimped supply chains around the world and slowed down construction.
This will drive up the value of both new and existing properties in the California housing market since the supply of new and redeveloped properties has been stifled. And there is certainly the possibility the California housing market will see bidding wars on the few available and desirable properties by people who have more margin thanks to historically low mortgage rates.
We can expect a few shifts in the California housing market long-term. Realtors will probably continue to utilize 3D virtual tours, using 360 cameras to capture images of every room in the house. This helps them sell the home 24x7x365, whether or not everyone is stuck at home.
While appraisers, stages, and construction crews can’t work remotely, we can expect far more back-office work in the real estate industry to be done remotely because that’s become commonplace. We can also expect online contract reviews and digital signatures to become the norm because it allows real estate transactions to move forward through some of the participants are at home.
Demand for housing was very strong before the coronavirus hit the U.S. This pandemic is not expected to last nearly as long as the United States subprime mortgage crisis, which was a nationwide financial crisis, occurring between 2007 and 2010.
The sharp sales drop in May was the steepest we’ve seen but there are encouraging signs that show the market is recovering and should continue to improve for the remainder of 2020.
Some of the realtors saw no decline in their businesses even during the peak of the pandemic. According to them, the real estate sector was really active even in the pandemic. The way of operating business has changed. People are working from home. They are using applications like FaceTime to show buyers homes instead of traditional open houses.
Lenders experienced a surge in demand as opportunistic buyers move to take advantage of low mortgage rates. Brett Jennings, the founder of Real Estate Experts, writes, “our market is still thriving” in Santa Clara County, seeing only a few cancellations despite shelter-in-place conditions and the fact that “we have one of the highest counts of active COVID-19 cases in California.”
According to Dr. Svenja Gudell, the chief economist of Zillow Group, when they examined pandemic histories ranging from the 1918 flu epidemic to the 2003 SARS outbreak, they noted that economies “snapped back quickly once the epidemic was over.”
Residential real estate is likely to fare far better than the commercial real estate sector. Sometimes, you have to take advantage of these market disruptions to see that many investors will pump the brakes on investing out of fear and other illogical emotional reasons, while others see the opportunity of having access to more real estate inventory, possibly better pricing, and still historically low-interest rates.
California Housing Market 2020 Summary: Prices | Sales | Inventory
Before the coronavirus outbreak, the declining interest rates bolstered February home sales and prices in the California housing market. The no. of home sales in February went up 6.6 percent from the 395,700 level in January, marking the first time in three months that sales jumped above the 400,000 benchmarks. February also marked the eighth consecutive month of year-over-year sales increases, according to the CALIFORNIA ASSOCIATION OF REALTORS®.
According to a United States Department of Commerce report, the median price nationwide for a home sold in February was $345,900, up 6.3 percent from January. As the coronavirus pandemic hit the country, the sales activity in the California housing market took a sharp decline. Many buyers backed out of purchase due to coronavirus concerns. Due to the Covid-19 outbreak, the new California home sales also began to drop from March onward. Here's the review of the California real estate market from March onward.
Impact of COVID-19 on the California housing market
The immediate impact of the coronavirus pandemic on the California housing market was that realtors canceled their open houses and half of all agents reported a drop in buyer interest. A flash poll conducted by C.A.R. between March 14-16 found that 54% of realtors had buyers who backed out from buying a home because of the coronavirus, and about 45% had sellers who backed out from selling a property. The pandemic further impacted the buying or selling of a house as California issued a statewide ‘stay at home’ order on March 19 to slow the spread of the coronavirus.
All non-essential businesses were essentially shut down. The real estate industry and many businesses that support it have been deemed non-essential. Real estate transactions like home buying, title research, residential leasing, and renting were allowed to continue. So were things like building maintenance and cleaning. Home construction was typically allowed to continue, as well. This meant that people could continue to live in their apartment and call the property manager to get the plumbing fixed.
Home sales and purchases already begun could be completed. However, it became much more difficult to arrange open houses or take photos of a property for sale. Some realtors adapted by setting up virtual showings of properties, whether it was via cell phone video, high-resolution photos, or drone. However, photographers can’t travel to properties, while stagers and appraisers can’t travel to homes that owners want to sell.
This froze the housing market for the most part due to shelter-in-place orders. Financial services were considered essential; this included banks and mortgage lenders. Unfortunately, the shutdown of up to 80 percent of the country means many are afraid to take out a home loan even if they still have a job. That is why mortgage applications fell by 30 percent in the last quarter of March 2020 while unemployment applications hit a record three million.
The U.S. Initial Unemployment Insurance Claims are that over 40 million people have already lost their jobs.
As new coronavirus cases were detected in California and the ‘shelter-in-place’ mandate was extended, a sharp sales decline resulted in an increase in unsold inventory – leading to a balanced real estate market. The COVID-19 pandemic kept both buyers and sellers on the sidelines in the California housing market. Many potential sellers delayed putting their homes on the market, which led to fewer new listings. Some of the buyers excited and decided to not enter the market due to their weak financial condition. California home sales experienced the worst month-to-month sales decline in more than four decades.
Home sales dropped sharply in April from both the previous month and year as the housing market began to feel the full impact of the state’s stay-at-home order, according to C.A.R.
This was because of a decline in open houses and home showings which are impossible to be held in such conditions. Existing, single-family home sales totaled 277,440 in April on a seasonally adjusted annualized rate, down 25.6 percent from March and down 30.1 percent from April 2019. Additionally, sales in escrow were also delayed by the closure or limited availability of all the essential services related to a home sale.
The statewide median price remained above the $600,000 benchmark for the second consecutive month in April, price growth showed clear signs of softening when compared to the past six months. The April statewide median price of $606,410 for existing single-family homes in the state dipped 1.0 percent from March, and the 0.6 percent gain was essentially flat from April 2019, when the median price was $603,030. The year-over-year price gain was substantially smaller than the six-month average gain of 7.8 percent recorded between October 2019 and March 2020.
California home sales fell to the lowest level since the Great Recession as the housing market suffered the full impact of the coronavirus pandemic in May, according to a June 16 release by CALIFORNIA ASSOCIATION OF REALTORS®. As housing demand in California fell sharply in May, home prices also took a dip. The median home price fell below last year’s price for the first time since February 2012 and breaking the state’s 98-month year-over-year price gain streak.
All major regions dipped in sales by more than 35 percent from last year. The Bay Area and Central Coast dropping the most at -51.1 percent each. Southern California home sales dropped by -45.6 percent, and the Central Valley by -36.6 percent. Existing single-family home sales were down by 13.9 percent from April and down by 41.4 percent from May 2019. May’s statewide median home price was $588,070, down 3.0 percent from April and down 3.7 percent from May 2019. Year-to-date statewide home sales were down 12.9 percent in May.
Median prices continued to dip in May from last year in the Central Coast and the Bay Area but inched up slightly in the Central Valley region. The median home price was virtually unchanged in Southern California. Unsold inventory Index jumped to 4.3 months in May from 3.4 months in April and was up from 3.2 months in May 2019. Total active listings continued to decline on an annual basis for the 11th consecutive month.
The 34 percent year-over-year decrease in listings was the biggest drop since March 2013. The median number of days it took to sell a California single-family home dipped to 17 days in May from 18 days in May 2019. C.A.R.’s statewide sales-price-to-list-price ratio was 99.7 percent in May 2020, up slightly from 99.3 in May 2019.
After the California real estate market suffered its worst month in 13 years, California’s Realtors and landlords saw a big rebound in June. The housing markets in Los Angeles, San Francisco, San Jose, San Diego, and Sacramento saw the biggest recovery. Home Sales were up 42.4 percent from May and down 12.8 percent from June 2019. The luxury market suffered the most with more than 50% drops in sales. Sales Price to List Price Ratio of 99.5% in June means homes are selling for very close to their listing prices.
June’s statewide median home price was $626,170, up 6.5 percent from May and up 2.5 percent from June 2019. Throughout the state, single-family home prices rose 6.5% to $626, 170, or a rise of $38,000 from the previous month. Sales grew 42.5% from May. California condo prices rose 4.6% and month-to-month sales increased by 68.5%. Condo prices have risen 4.6% YoY while sales slumped 16.2%.
The return in the COVID-19 cases remains a concern across the nation as well as California, and it may hinder the recovery of the housing market in the second half of 2020. Meanwhile, the lowest ever mortgage rates have been able to increase the buyer activity, which in turn may help to sustain the rise in sales in the coming months.
After falling to the lowest level since the Great Recession, continued to improve in August as home sales climbed to their highest level in more than a decade as the median home price broke last month’s record and hit another high, according to September 16 release by C.A.R.
Existing, single-family home sales totaled 465,400 in August on a seasonally adjusted annualized rate, up 6.3 percent from July and up 14.6 percent from August 2019. August’s statewide median home price was $706,900 up 6.1 percent from July and up 14.5 percent from August 2019. Year-to-date statewide home sales were down 6.8 percent in August.
In September, the California housing market outperformed expectations, breaking record high median price for the fourth straight month. Existing, single-family home sales totaled 489,590 in September on a seasonally adjusted annualized rate, up 5.2 percent from August and up 21.2 percent from September 2019.
September’s statewide median home price was $712,430 up 0.8 percent from August and up 17.6 percent from September 2019. Year-to-date statewide home sales were down 3.7 percent in September. The home price exceeded the $700,000 mark for the second consecutive month.
The latest report for October shows that the home buying season has extended into fall as home sales and prices remain elevated.
California Housing Market Report For October 2020
Here are some of the highlights of how the California housing market performed in October 2020, according to the November 17 release by C.A.R.
Existing-Home Sales
- At the regional level, sales increased in October in all major regions from last year with growth rates of more than 10 percent in all but the Central Valley.
- The Central Coast had the biggest increase in October with sales growing by 28 percent.
- That was followed by the Far North (19.4 percent), the San Francisco Bay Area (18.9 percent), and Southern California (17.5 percent).
- The Central Valley region was the only region without a double-digit gain from the prior year but still grew by 9.9 percent from a year ago.
- Additionally, all counties in Central Coast, Southern California, and the San Francisco Bay Area experienced year-over-year sales gain in October.
- More than four out of five counties – 43 of 51 – tracked by C.A.R. experienced a year-over-year gain in closed sales with Mariposa increasing the most from last year at 126.7 percent, followed by Mono (60.0 percent) and Plumas (53.1 percent).
- Seven counties decreased in sales, with Yuba declining the most at 16.5 percent from last year.
Median Price
- At the regional level, all major regions posted double-digit, year-over-year median price increases.
- All regions, except the Far North, set a new record high median price in October.
- The Central Coast led the pack again with an increase of 25.9 percent.
- The San Francisco Bay Area had the second-largest price increase of 17 percent.
- In Southern California, the median home price increased by 15.4%.
- In Central Valley, the median price increased by 14.7%.
- The Far North also recorded a 12.8% gain in the median price.
- All but one of 51 counties tracked by C.A.R. reported a year-over-year price gain with 39 of them growing 10 percent or more.
- Santa Barbara had the highest price increase, gaining 64 percent year-over-year.
- San Francisco was the only county with a drop in price, with its median price declining 1.5 percent from the same month last year.
Housing Supply
- Active listings declined slightly from the prior month without affecting the momentum of sales in the traditional off-season months.
- The Unsold Inventory Index (UII) in October was unchanged from September when it reached the lowest level in nearly 16 years (since November 2004).
- The UII fell sharply from 3.0 months in October 2019 to 2.0 months this October.
- Most regions saw a decline of more than 40 percent in active listings from last year.
- The Central Valley had the biggest year-over-year drop of 49.6 percent in October.
- Active listings in Southern California declined by -46.6 percent.
- Active listings in Central Coast declined by -46.5 percent.
- Active listings in the Far North declined by -40.9 percent.
- Active listings in the San Francisco Bay Area declined by -23.8 percent.
- Forty-nine of the 51 counties reported by C.A.R. experienced a year-over-year decline in active listings in October.
- Santa Barbara had the biggest drop from last year, with a decline of 64.8 percent.
- Ventura had a decline of -62.3 percent and San Bernardino -60.9 percent.
- Nineteen counties had less than half the active listings they had in October 2019.
- San Francisco (34.3 percent) and San Mateo (0.7 percent) remained the only counties in California with an increase in active listings from the prior year.
Median Days & Sales Price to List Price Ratio
- The median number of days it took to sell a California single-family home was 10 days in October, down from 24 in October 2019.
- The October 2020 figure was the lowest ever recorded.
- C.A.R.’s statewide sales-price-to-list-price ratio was 100.2 percent in October 2020 and 98.5 percent in October 2019.
- Looking at sale-to-list percentages can help buyers and sellers get a sense of how to negotiate on pricing. The higher ratio of 100% or above shows a strong market favoring sellers.
Mortgage Interest Rate
- The 30-year, fixed-mortgage interest rate averaged 2.83 percent in October, down from 3.69 percent in October 2019, according to Freddie Mac.
- The five-year, adjustable mortgage interest rate was an average of 2.89 percent, compared to 3.38 percent in October 2019.
California Housing Market – Regional Sales and Price Trends – October 2020
The Central Coast had the biggest increase in October with sales growing by 28 percent, followed by the Far North (19.4 percent), the San Francisco Bay Area (18.9 percent), and Southern California (17.5 percent). The Central Valley region was the only region without a double-digit gain from the prior year but still grew by 9.9 percent from a year ago.
The Central Coast led the pack again with an increase of 25.9 percent, as high-end home sales in Santa Barbara and Monterey continued to surge. The San Francisco Bay Area had the second-largest price increase of 17 percent, followed by Southern California (15.4 percent), the Central Valley (14.7 percent), and the Far North (12.8 percent).
| October 2020 | Median Sold Price of Existing Single-Family Homes | Sales | |||||
| State/Region/County | Oct. | Sept. | Oct. | Price MTM% Chg | Price YTY% Chg | Sales MTM% Chg | Sales YTY% Chg |
| 2020 | 2020 | 2019 | |||||
| Calif. Single-family home | $711,300 | $712,430 | $605,280 | -0.20% | 17.50% | -1.00% | 19.90% |
| Calif. Condo/Townhome | $520,000 | $527,000 | $475,000 | -1.30% | 9.50% | 2.50% | 24.50% |
| Los Angeles Metro Area | $632,710 | $630,000 | $545,000 | 0.40% | 16.10% | 6.00% | 16.80% |
| Central Coast | $850,000 | $838,500 | $675,000 | 1.40% | 25.90% | -4.30% | 28.00% |
| Central Valley | $395,000 | $390,000 | $344,500 | 1.30% | 14.70% | 2.50% | 9.90% |
| Far North | $344,000 | $349,900 | $305,000 | -1.70% | 12.80% | -2.80% | 19.40% |
| Inland Empire | $445,000 | $445,000 | $380,000 | 0.00% | 17.10% | 0.60% | 17.50% |
| San Francisco Bay Area | $1,100,000 | $1,060,000 | $940,000 | 3.80% | 17.00% | 1.50% | 18.90% |
| Southern California | $657,750 | $656,750 | $569,900 | 0.20% | 15.40% | 3.30% | 17.50% |
The question now is what happens moving forward. These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? It is a win-win scenario for both sellers and buyers.
The California housing market would continue its V-shaped recovery in the coming months. Home sales rebounded in June for the first time since the pandemic and California’s median home price reached $626,170, improving 6.5 percent from May and 2.5 percent from June 2019.
The monthly price increase was higher than the historical average price change from May to June and, in fact, was the highest ever recorded for a May-to-June change. Factors are businesses reopening, mortgage payments are falling, and some sellers are more ready and eager to sell.
We expect to see a decrease in closed sales (MTM) in the next few months which is traditionally an off-season. Home sales volume won’t recover fully until well after the pandemic response has ended. Due to an underlying recession and financial slump, a full recovery is not likely to begin until 2021. There is also a fear of the pandemic hitting back. Cases are rising and the government has brought back restrictions.
The state and local officials are rapidly adding new restrictions in hopes of slowing the infection rate. The new lockdown measures include a limited late-night curfew in most of California and the shuttering of outdoor restaurant dining in Los Angeles County. The year to date sales is expected to remain below pre-COVID-19 levels if the buyers and sellers step out of the market amid the rising cases of coronavirus.
Whether you’re looking to buy or sell, timing your local market is an important part of real estate investment.
For sellers in the California housing market, it is a good time to sell. A low inventory would keep the prices from falling. Sales Price to List Price ratio has been 100.2% in October, which means homes are selling for almost at their asking prices. A seller would always prefer this ratio to be close to 100% or higher.
For buyers in the California housing market, it is a good time to buy. Unsold inventory has dropped as there are fewer active listings and sales are rising. The inventory is low with a supply equalling 2.0 months for single-family homes and 2.5 months for condos. The index indicates the number of months it would take to sell the supply of homes on the market at the current rate of sales.
This will lead to much higher price growth. However, low-interest rates continue to fuel optimism for homebuying. The 30-year, fixed-mortgage interest rate averaged 2.83 percent in October, down from 3.69 percent in October 2019, according to Freddie Mac.
Recent forecasts from industry groups like Freddie Mac and the Mortgage Bankers Association have predicted that the average rate for a 30-year fixed mortgage could stay within the low 3% range well into 2021. Interest rates will remain low giving buyers the purchasing power and home prices a boost. All of these factors have led to the market to optimism in homebuyers.
References:
- https://www.car.org/aboutus/mediacenter/newsreleases
- https://www.zillow.com/ca/home-values
- https://lao.ca.gov/LAOEconTax/Article/Detail/265
- https://sf.curbed.com/2020/3/23/21188781/sf-housing-market-coronavirus-covid-19
- https://www.ppic.org/publication/new-patterns-of-immigrant-settlement-in-california
- https://fox40.com/news/business/local-real-estate-market-slows-amid-covid-19-pandemic
- https://www.point2homes.com/news/us-real-estate-news/experts-california-real-estate-2020.html
- https://www.washingtonpost.com/business/2020/02/27/mortgage-rates-head-back-down-coronavirus-fears
- https://www.cnbc.com/2020/03/18/weekly-mortgage-applications-drop-over-8percent-as-interest-rates-jump.html
- https://www.usnews.com/news/business/articles/2020-03-25/business-fallout-companies-in-china-see-delays-in-reopening
- https://www.dallasnews.com/business/real-estate/2020/03/25/homeowners-who-cant-pay-their-mortgages-are-getting-help
- https://www.wfsb.com/news/businesses-considered-essential-under-stay-safe-stay-home-policy/article_53f8e0d0-6d17-11ea-a04d-57ecbb72c518.html
