As new coronavirus cases were detected in California and the ‘shelter-in-place’ mandate was extended, a sharp sales decline increased unsold inventory – leading to a balanced real estate market. 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. Five of the nine counties in the region continued to increase by double digits, while the rest were up more modestly. 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. Condo prices have risen 4.6% YoY while sales slumped 16.2%. This froze the housing market for the most part due to shelter-in-place orders. 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. 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. The November 2020 figure was the highest since August 2007. This will lead to much higher price growth. 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. Updated January 2020: By searching, you agree to the Terms of Use, and Privacy Policy. 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. However, due to an underlying recession and financial slump, a full recovery is not likely to begin until 2021. The state has four of the country’s five most expensive residential markets—Silicon Valley, San Francisco, Orange County and San Diego. 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. California Housing Forecast 2021: What Do We Think! The coronavirus outbreak has closed businesses and kept people hunkered down in their … Interest rates will remain low, giving buyers the purchasing power and home prices a boost. California Housing Market 2020 Summary: Prices | Sales | Inventory, California Housing Market Report For November 2020, forecast released by CAR on October 13, 2020. 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.”. Home prices statewide were up 12.8% year-over-year in December. 37 of 51 counties saw price increased by 10 percent or more. An average of 893 daily closed transactions was reported in the past week (Nov 29 to Dec 5). Total sales broke the 500,000 level in November, which is an indication that buyers and sellers are beginning to realize that real estate deals can still be conducted despite the coronavirus pandemic. Despite a minor month-on-month sales decline in October, the consistent V-shaped recovery points to the housing strength for several more months. At the regional level, all major regions posted an increase in the median price from a year ago by more than 10 percent. It is a win-win scenario for both sellers and buyers. 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. The 30-year, fixed-mortgage interest rate averaged 2.77 percent in November, down from 3.70 percent in November 2019, according to Freddie Mac. And with mortgage interest rates trending downward, the California housing market predictions for the rest of 2019 are brighter than what most had initially anticipated. Millennials will want to move out of their parents’ homes and into their own. For sellers in the California housing market, it is a good time to sell. Despite high unemployment and rising restrictions due to COVID-19, the California housing market remains very competitive as homes are selling quickly with a minimal price reduction. Home price again took a breather in November as price gains declined consecutively for the second time on a month-to-month basis. Demand for housing was very strong before the coronavirus hit the U.S. The Southern California housing market is showing signs of heating up after a coronavirus-induced slump. Almost half of the consumers (49%) believe that California home prices are going to rise in the next twelve months while only 37% feel that it will be easier to find a home in that period. Additionally, sales in escrow were also delayed by the closure or limited availability of all the essential services related to a home sale. The Central Coast region had the second-largest median price increase at 18.7 percent. 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. 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. The Unsold Inventory Index (UII) fell sharply from 3.1 months in November 2019 to 1.9 months this November. Senior Vice President and Chief Economist Leslie Appleton-Young. The U.S. A high or growing percentage of homes selling above list…. The state’s unemployment rate will dip to 9.0 percent in 2021 from this year's projected rate of 10.8 percent. Whether you’re looking to buy or sell, timing your local market is an important part of real estate investment. NEW Report: California Housing Market Update // Are home prices and home sales decreasing in California? 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. They…, Homes that sold above list price likely received multiple offers. Sales of higher-priced properties are recovering faster than the rest of the market. He’s also the host of the top-rated podcast – Passive Real Estate Investing. Currently, the typical value of homes in California is $609,757. 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. Southern California home sales dropped by -45.6 percent, and the Central Valley by -36.6 percent. 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. Jordan Levine, the deputy chief economist for the California Association of Realtors (C.A.R. June’s statewide median home price was $626,170, up 6.5 percent from May and up 2.5 percent from June 2019. Here's the review of the California real estate market from March onward. As the coronavirus pandemic hit the country, the sales activity in the California housing market took a sharp decline. 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. California home sales experienced the worst month-to-month sales decline in more than four decades. Laguna Niguel, CA 92677, Copyright 2018 Norada Real Estate Investments, Impact of COVID-19 on the California housing market, California Housing Market – Regional Sales and Price Trends – November 2020, https://www.car.org/aboutus/mediacenter/newsreleases, 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, California Housing Market Weekly Trends (Dec 6 – 12), California Housing Market Forecast 2021 (Updated). Yet the state continues to attract immigrants from around the world. Ongoing job losses could lead to fewer home sales in Q3 – Q4 2020. experienced a year-over-year decline in active listings in November. What is the housing market like right now? Some realtors adapted by setting up virtual showings of properties, whether it was via cell phone video, high-resolution photos, or drone. Five of the nine counties in the region continued to increase by double digits, while the rest were up more modestly. The forecast for California’s housing market in 2021 is relatively favorable but things could change, given the seriousness of the pandemic. Orange County, CA (iStock) Home sales prices in Southern California jumped in October as buyers flock to the market, thanks in part to low mortgage rates. Through the first 11 months of the year, resort markets have been outperforming the state in general. 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. Things could be worse than they are, given the seriousness of the public-health crisis. Cases are rising and the government has brought back restrictions. Realtors will probably continue to utilize 3D virtual tours, using 360 cameras to capture images of every room in the house. Filed Under: Growth Markets, Housing Market, Real Estate Investing. Here are some of the highlights of how the California housing market performed in October 2020, according to the December 17 release by C.A.R. The San Francisco Bay Area had the highest gain of 34.4 percent over last year, followed by the Central Coast (33.4 percent). California housing market ends year on high note as sales continue strong in December and median price reaches another record high, C.A.R. Sales have declined for the last three years. South Lake Tahoe (81.4 percent), Big Bear (73.9 percent), and Lake Arrowhead (58.1 percent). 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. If you are using a screen reader, or having trouble reading this website, please call Redfin Customer Support for help at 1-844-759-7732. 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. We can talk about the many people who’ve moved out of California to other states. Buyer demand remains robust and that has already pushed California’s median price above $700,000. There is an exceptional buyer-interest in the off-season. 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. 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. REDFIN and all REDFIN variants, TITLE FORWARD, WALK SCORE, and the R logos, are trademarks of Redfin Corporation, registered or pending in the USPTO. It was followed by Central Valley (17.6 percent), Southern California (14.4 percent), and the Far North (13.6 percent). Copyright: © 2021 Redfin. Home Sales were up 42.4 percent from May and down 12.8 percent from June 2019. Some of the buyers were excited and decided to not enter the market due to their weak financial condition. 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. Except for the Bay Area, all major regions experienced a year-over-year decline in active listings of 40 percent or more in November. Year-to-date statewide home sales were down 12.9 percent in May. Sales remain strong in a traditional off-season and December looks promising across the region. Due to a wave of job losses nationwide, this will create many distressed home sellers in the California real estate market, as well. For the second week in a row, rates hovered at the all-time low level of 2.71% according to the latest Freddie Mac survey. Mariposa was the only county with a drop in its median price, declining 8.8 percent from the same month last year. The real estate industry and many businesses that support it have been deemed non-essential. 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. Year-to-date statewide home sales were down 6.8 percent in August. Early forecasters thought the housing bubble would bust in California and a housing market crash was bound to happen before the end of 2020. Here’s the latest real estate market news! All of these factors have led to the market to optimism in homebuyers. Coronavirus-Induced slump the U.S Diego, and Lake Arrowhead ( 32.0 percent.... 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