California housing market losing steam leads to positive outcomes
Friday, September 20th, 2013
Issue 38, Volume 17.
These dramatic increases in price however, were largely driven by lack of available inventory of homes for sale as well as a significant presence of investors and cash buyers. Tight market conditions led to a rise in multiple offers, with sales
occurring on the first day listed on the MLS, resulting in selling prices above asking prices creating market conditions to favor the seller.
However, there are indications that some of California’s real estate markets may be at a turning point, per CAR. Jump in rising mortgage rates initially presented a sticker shock for many potential buyers who may have already been discouraged by
fiercely competitive bidding wars and the number of cash offers.
Their first reaction was to postpone their home purchases. But now as everyone is beginning to realize that mortgage rates will mostly not be coming down to levels observed last year, and that housing is still relatively affordable by historical measures, buyers are slowly
readjusting their expectations and are coming back to the market.
Other indicators, like fewer listings still under contract within a week or two of being listed, along with inventory levels, are continuing to increase. While we arenot back to
what we would call a healthy market of 6.5 month supply per national standards, locally, we are back up to two months supply of homes from less than one earlier this year, per
SRCAR monthly REALTOR® Report.
Additionally, investors are playing a smaller role as rising prices and interest rates have squeezed investor’s profits margins. Investors are also hard pressed to find any distressed properties which have dwindled to less than a month supply of inventory. This interim has created a great supply of equity sales, a much
needed development, and will aid the market to continue to grow going forward.
None of these changes to the housing market in California suggests that the recovery is in jeopardy. On the contrary per CAR, real estate markets are moving into a
state of more measured and sustainable housing recovery in which traditional buyers and seller will play a greater
role, still making it a great time to buy for you and me. Remember to hire a trusted local REALTOR® to find out the latest within your community of interest.
If you have questions regarding available inventory to purchase or the current bank servicer’s short sale incentives to sellers, contact Mike Mason, broker/owner of Mason
Real Estate BRE: 01483044, Board of Director of your Southwest Riverside County Association of REALTORS® (SRCAR), Short Sale & Foreclosure Resource certified by National
Association of REALTORS® (NAR) at
Mike@GoTakeAction.com or call (951) 296-8887.
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