If you’re buying in this present housing market, think long term, according to the advice from Jordon Levine, the Chief Economist of the California Association of Realtors. Mr. Levine gave a very insightful presentation to the Ridgecrest Area Association of Realtors on Monday.
Home sales around the state are falling to 2008 levels. Buyer demand at this time is even dipping below pre-pandemic figures. In fact, recent sales activity in California is 37.6% below pre-pandemic levels. Inflation seems to have cooled a bit, Levine adds, but it is expected to be elevated for the short term.
Interest rates are still low by historical standards, but they are set to further rise. Because of inflation, and the rising Fed rate to control it, home mortgage interest rates are predicted to rise to 6.4% and possibly 7% in 2023.
There is still low housing inventory statewide and at present the price of homes remains overvalued. Thus, price declines, if any, will be temporary Levine believes. Buyers who are into purchasing for the long term will do very well in this market. If you are a short-term investor seeking a quick flip, this is not your season.
In retrospect, back in 1988 the median California home price sat at $168,200. In the summer of 2022 it is now $863,400. Historically, California homes have seen a few downward trends, but they have always risen in value over the long term. Owning a home is still the best investment for long term financial gain than any other means.
The California population continues to grow while home building permits have dropped. This means for the years ahead demand will always outweigh supply when it comes to housing. Thus, the shifting market is good for buyers at this time. Less buyers to compete with, and price reductions are on the horizon.
The presentation can be found at www.car.org/marketdata/Speeches & Presentations.
Real Estate In The Know: Economic factor facing local housing | Opinion & Latest News Update
Real Estate In The Know: Economic factor facing local housing | Opinion & More Live News
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