Southern California Home Sales in 2016 – “Most economists agree that housing prices and sales will continue to grow in 2016, just at a slower pace. Call it a slowdown, but not bad news. …”
Southern California Home Sales in 2016:
Five Predictions From Redfin
As we did in Monday’s post, today we’re presenting another set of predictions regarding Southern California Home Sales in 2016. These are a bit less specific to our own area here in the San Gabriel Valley. They come from the online real estate brokerage and analyst house, Redfin, and they are nationwide predictions. Even so, this 2016 Home Sales Forecast is likely what you’ll see in the Southern California home sales market next year, and it’s a mixed bag of news.
As with most analysts, the Redfin predictions do not forsee any “booming” going on. They are focused on the moderation of things in general. They find that the housing market, in general, will continue to grow, but at a slower pace than we’ve seen. This is actually better news for buyers. If the market maintains growth while moderating the rate of exchanges and the rise in prices, that’s good news for buyers, and indicates a healthy market long term.
Redfin’s 5 Predictions are:
1) Prices and Sales Will Grow 1/2 As Fast
2) Credit Will Ease A Bit
3) There Will Be More (and older) First Time Buyers
4) The Market Will Slow & We Will See Slower Closings As Well
5) Inventory Shortage Will Continue
The specifics of why Redfin is predicting each of these and just what effect the item will have on the market can all be found on the Redfin Blog post itself. This particular post was written by Nela Richardson, and she does a fine job of illustrating the “why’s and wherefore’s” of her 2016 housing market predictions.
“Next year holds a few interesting developments, some good for housing, some bad. Easier credit will bring in more buyers, but higher mortgage rates, continued low inventory and the wildcard of a presidential election will weigh down growth. All things considered, we see a fairly uneventful housing market next year.”
Southern California Home Sales in 2016: Slow and Steady
Our national and regional real estate markets have made a really dramatic recovery over the last few years. Dramatic recoveries create stress. As in any market, a “resting” period or a “retracement” becomes necessary. Buyers and Sellers look for a little “breathing room” where they can take a step back and not feel so rushed to get their timing right. This is the consensus of what we should expect for 2016. And it’s not completely unwelcome news. A “resting” market is usually a good indication of market health, and in the long run that’s good news for both sellers and buyers
It should be noted that not all sectors of the housing market perform the same. On Friday we’ll look at a sector of housing that’s not “hitting the marks” as well as the others. Since this sector is somewhat of a “leading indicator” of future general market performance, it bears looking into the reasons for its current under-performance. Join us for our next post where we’ll discuss the difficulties being experienced by the Luxury Home market these days.
Southern California Home Sales in 2016.
California Home Sales:
Prices Soar Across Southland
California Home Sales Numbers Show Large Jumps
In Both Price And Activity
All across the Southland, the California Home Sales market is posting some really impressive numbers. Prices are way up, as anyone with any knowledge will tell you, but activity has increased as well. In the San Fernando Valley the median price of a home increased by 39% in May of thixs year over last year.
The good news is not restricted to resale market. Sales of new homes posted their highest rates in five years.
Here's the complete run down on California home sales from Gregory J. Wilcox in the Los Angeles Daily News
Prices in the Los Angeles metro area are up 19 percent from a year ago, according to a widely watched index released Tuesday. … In the San Fernando Valley, the median price of a previously owned home soared a record 39 percent in May and cracked the half million mark again, a trade group said. … And San Bernardino County’s median price jumped 28 percent last month, according to market tracker DataQuick…."
Are California Home Sales Numbers Bubble-Bound?
Some analysts have begun to worry that, with such good numbers posted recently, the California home sales market might be in the beginnings of another "bubble" experience. Actually, the fundamentals of the market are solid and so are the "technical" indicators. We should expect a slow down to the rise in prices and activity to begin to kick in within the next couple of months, but that will be normal and healthy market adjustment activity. Those who are seeing "bubble activity" in the California home sales market at this point, may be getting a bit "overblown" themselves.
California Home Sales.
California Home Sales:
Median Price Sees Largest Jump In 33 Years
At Least 34.5% Of California Home Sales In May
Were $500K And Up
More good numbers in California home sales in May were just reported. The California Association of Realtors reports that the state's median home price increased to $417,350 from $316,460 in May 2012. This is an increase of 34.5% over may of last year, and that's the largest year-over-year jump since February of 1980. Additionally, the percentage of sales over $500K increased.
Here's a Video from the National Association of Realtors with some good numbers from a couple of weeks ago:
More currently still, here's an article from Gregory J. Wilcox in the Los Angeles Daily News with those numbers and a lot more:
"The median price of a previously owned house in California soared 31.9 percent in May, the largest year-over-year increase in more than three decades as sales of more expensive properties increased and inventory remained tight …"
Other Factors Also Support California Home Sales
There are other good things going on in the California Home Sales market as well. The market numbers are currently being supported by fewer REO sales and continuing low interest rates. Good news in the coming months can be supported by the fact that Buyers are using more conventional financing strategies and are also investing higher down payments than they have previously.
California Home Sales.
Real Estate Values:
What Does A "Median-Priced" Home
Real Estate Values Change from Area To Area …
What Can You Get In Your Region?
Now here's an interesting question, and a great article, concerning real estate values in different markets across the U.S.: What does a "Median-Priced" home look like where you live? Or … where you want or need to move? Things are different in Los Angeles than they are in Minneapolis. What are they like where you are?
Well, nationally, real estate values now show us that the "median home price" nationally, has risen to about $155,400. So … what will $155K get you in Los Angeles? What can you buy with it in Seattle?
Here at the Costa Real Estate digest, we love these kinds of real estate values questions … and we love a good report that clears these things up! Here's a report from Meg Handley of U.S. News and World Reports that's really interesting … and fun!
"With news that home prices are going up across the nation, house hunters might be getting a little more anxious when it comes to signing a contract to buy their dream home… Nationally, median home prices have increased almost 5 percent year-over-year to about $155,400… So what can kind of house can you buy for around $155,400?" … Meg Handley
Do Real Estate Values Dictate Where You Buy …
Or Do You Buy Where You Want Or Need To Be?
There's another interesting question: Do market conditions dictate where you buy? Or is that a question informed by a lot of other things that may have more influence? If you're an investor, for instance, the question of real estate values may carry more importance to you than to a couple of young parents trying to buy in a certain school district.
Whatever the case, that's another interesting real estate values question we'd like to discuss around here. If you have suggestions for topics you might like to see covered in these pages … please leave your comments, or use the "Contact Me" page to get the information to us. We'd love to hear from you!
Real Estate Values.
California Home Sales:
High-End Homes Selling Briskly
California Home Sales – High-End Homes One Of The More Active Contributors To Market
Even though inventory is down in the California Home Sales market, high-end homes … with prices falling between the $1 million to $2 million range … are selling at a quicker pace than most of the rest of the market.
Here's a report by Mike Perrault of The Desert Sun, as reprinted in USA Today:
"2012 – PALM SPRINGS, Calif. — Though housing inventory is down across the country, high-end homes are seeing a resurgence in many markets. Part of the reason: Owners have decided to accept less than they originally wanted for their properties …"
Sellers Come To Grips With Reality Of The
California Home Sales Market
One of the most difficult things for a Seller to do is to actually come to grips with the reality of the California Home Sales market. It can be a strenuous exercise for the owner of a property to bridge that mental gap between what he believes his property is "worth", and what an informed buyer will pay. It seems, from this report, that high-end sellers are currently becoming more mentally "in line" with the actualities of the California Home Sales market.
California Home Sales.
Real Estate Sales:
New Home Sales On The Rise
As Real Estate Sales Rebound In General, New Home Sales Are Also On The Upswing
A new report on real estate sales from the consulting firm of John Burns Real Estaqte Consulting shows that new home sales are also on the rise. The Irvine firm reports a 25% increase over this time last year and that new home sales now make up about 8% of the areas real estate sales.
Read about it here, in this report from Alejandro Lazo of the Los Angeles Times:
Alejandro Lazo – "The economists at the Irvine firm (John Burns Real Estate Consulting) highlight 25% growth in year-over-year new home sales, and an increase of 36% from the bottom, which was reached in 2011. The firm's data show that new home sales currently account for about 8% of the market, up from a low of 5% during the bust and down from about 16% during the heady days of the bubble." …Los Angeles Times
Real Estate Sales: New Home Sales Constrained By Some Factors
The report also states that new home sales could be somewhat constrained right now because of several factors. Among those are the lack of distressed sales (foreclosures and short sales) in the area market right now as banks are fairly reluctant to foreclose, and the lack of many good, inexpensive development properties on the market. These are factors that will adjust as the market shakes itself out.
Real Estate Sales.