More Buyers, fewer Sellers, record-low interest rates and increase in rental values made Southern California home sales jump over 25 percent this past October, compared to October 2011, a three-year high, according to real estate research firm DataQuick. Not surprisingly, coastal markets saw the biggest increase in sales, especially such prime locations as Newport Beach and Costa Mesa. DataQuick reports Orange County saw the biggest surge in all of Southern California, with sales volume up 41 percent over last year.
With foreclosure sales at a five-year low (due in part to the Obama administrations’ push to curtail foreclosures and extensive legal protections for homeowners in California), and many owners still unable or unwilling to sell their properties (either due to a lack of equity and/or knowledge that prices are increasing), there is an overall shortage in the marketplace. Investors are snapping up ‘fixer’ homes with all cash offers, flipping them for sale or keeping for rentals. Buyers with strong credit and income can qualify for all-time low interest rates, still under 3.5 percent.
All of this leads experts to believe home prices will continue to rise. Stuart Gabriel, director of UCLA’s Ziman Center for Real Estate was quoted in the Los Angeles Times stating, “There is a growing appreciation of the fact that we’ve come to a sort of a point of inflection in the housing market. The housing market, for a large number of factors, is perceived as having turned a corner.” Christopher Thornberg, a principal at Beacon Economics, one of the first to call attention to the housing bubble, was quoted stating that home buyers should expect expensive housing in California for the foreseeable future. He stated, “Why would it stop? The economy is growing. Short of a fiscally led second recession, there is no reason in the world that it’s going to do anything but to continue.”
The decision to buy of course warrants serious consideration. But for those ready and able to take advantage of today’s record-low interest rates, this may be the ideal time, especially before the traditional uptick in the Spring and Summer when more people tend to move, and are looking to buy.
If you are ready to buy – after pre-approval with a reputable lender (see other postings on this Blog as to pre-approval), consult with a reputable REALTOR® in the local market you are searching. All real estate is local and national trends are irrelevant to many markets.
2901 West Coast Highway Suite 200
Newport Beach | California | 92663-4023