California’s Real Estate Market is Bending towards Buyers for the Summer
Looking at housing reports for April 2019, we can see that the real estate market is bending towards buyers for the summer. As the weather warms up, so are opportunities for buyers. They are steadily gaining negotiating power as the housing market appreciation slows, especially in some of the nation’s hottest markets.
California markets, in particular, have seen the biggest shift towards buyers. According to Zillow’s Buyer-Seller Index, in 20 of the 35 largest U.S. metros, market conditions favor buyers more than they did a year ago.
Here is a chart showing the cities with the biggest cool down from a sellers market to a buyers market with the California markets highlighted.
Peak home buying season is right around the corner. Year over year, the busiest times for real estate purchases is April through September. Sellers are generally happy with their home appreciation and many are motivated to sell before the school year starts up again. Based on the most recent housing market trends and articles, we are expecting to see an increase in the amount of inventory for the next few months.
How does the housing market in April 2019 compare to the housing market last year? In 2018 buyers faced more challenges on their path to home ownership. Mortgage rates increased many times, home price growth was twice as fast an income growth and we had a severe shortage of available inventory. While California still has a shortage of housing (specifically multiunit housing and affordable homes), buyers will find more options available this year. Most industry experts predict housing starts to increase by around 2.5 percent. Everyone (buyers, sellers and real estate professionals) seem excited for the expected uptick in activity.
According to a report by Realtor.com, the strongest real estate markets have two things in common: affordability and a strong economy. As the world’s 5th largest economy, California’s economy is likely to grow at a rate of 2.55 percent in the next 6 months, which is considerably faster than 1.59 percent of the national growth rate. Over the last 12 months, ending in February 2019, California’s economy grew by 4.7 percent as against 2.8 percent for the national rate. The strong economy has most people feeling encouraged and expecting the housing market to remain stable and a good investment for years to come.
That said, forecasting the long-term future of California’s housing market – in terms of rents, availability, taxes, and taxes prices – is proving challenging for experts. There is a big influence in most California cities from international real estate investors, which adds a level of volatility to the market. Without knowing how global economies will interact through policy changes, it’s hard to predict growth rates and declines more than 6 months in the future, though that doesn’t stop a lot of people from trying.
While we can’t predict the market, there are a lot of personal decisions we can make that will have just as big of an impact on our own ability to own property. What can you do to prepare to buy a home this summer or in 2020? Ask for our list of the Top 10 ways Californian’s can Get Ahead in Housing.