SOUTHERN CALIFORNIA HOUSING MARKET UPDATE – Over the last year or so the Southern California housing market has seen a substantial uptick in prices. This comes as a welcome relief to many homeowners who saw their home’s equity disappear during the crash a few years earlier. The question now is, will this fast paced rise in home values continue and if it does is it a sign of a recovering and healthy housing market or is the possibility of another housing bubble on the horizon?
Taking a look at the data from October 2013 it would appear that things have slowed down from the torrid pace earlier in the year and this might not be a bad thing. A healthy housing market (and stock market for that matter) should show gradual and consistent gains over an extended period of time. These wild and sharp swings in the market do not necessarily equate to health.
While home prices have remained mostly level, it appears some buyers have decided to take a step back possibly turned off by the bidding wars and multiple offers that were prevalent just a few months ago.
If you are a buyer looking to get into the market now is a great time to do so as there is currently more inventory to choose from and sellers are having to put more effort into attracting buyers by updating their property and allowing concessions at closing. Also, the median sales price for a home in California is still approximately $100,000 less than it was at its peak in 2007 offering plenty of room for equity gains.
If you are a seller thinking of putting your house on the market now may not be a bad time as well. While it is true there is now more inventory available, there are also many buyers sitting on the sidelines just waiting for that perfect property to pop up. Also, distressed sales have declined substantially which had been a major hurdle for traditional sellers to overcome in the past. Foreclosure sales were down to 6.6% last month, the lowest level since 2007 and down from a peak of 58.8% in 2009. Short sales are also on the decline checking in at 12.6% last month which is down from 26.7% just one year earlier.
While the housing market may not be booming like it was earlier in the year, it has continued to show signs of healthy growth and a leveling off of price increases isn’t the worst thing to happen. We are not completely out of the woods yet but there are many indicators that appear to show the housing market in general is improving.
DataQuick October 2013
-Statistical Data and Graph provided by Data Quick; DQNews.com