Making Sense of Conflicting California Housing Market Predictions
There’s a lot of conflicting information regarding the current state of the housing market in California. While some believe that trouble is on the horizon, research suggests that home sales around the state are about to pick up.
Over the past year, we’ve all heard talk of possible housing market crashes and recessions. However, a crash has not occurred and with interest rates hovering around 4%, homes continue to sell in California. Increasing wages throughout the state and seller’s willing to negotiate may also be a contributing factor. However, many potential buyers are still waiting for home prices to drop.
Lack of available housing and the growing population continues to drive home prices up throughout much of California. Whil e new construction of multi-family units has picked-up in several cities, there is still some opposition from neighboring residents which will slow development.
Millennial Home Buyers Increase as Baby Boomers Sell
According to a 2016 Pew Research Center survey, 72% of all renters say they would like to own a home one day. Unfortunately, some millennials – those born between the early 1980s and early 2000s – face an exorbitant amount of student debt. A large portion of this generation also entered the workforce in the shadow of the Great Recession. Despite these challenges, we’re seeing an increasing number of millennials buying as baby boomers sell, many times they will forgo an expensive wedding for a down payment or use GoFundMe for their down payments.
Encouraged by this increase, mortgage lenders are beginning to experiment with new ways to streamline the application process and verify creditworthiness. For example, the new FICO system will enable potential buyers with lower credit scores to improve their score by responsibly managing their checking and savings accounts. These new practices, combined with stabilized interest rates, provide the perfect opportunity for millennials to make the switch from renting to owning.
Quality of Traffic Improves in California
While less people are out looking, those that are out are serious buyers. Homes are selling in California despite the fact that traffic numbers have dropped, in some communities we are experiencing less than 9:1 traffic to sale conversion. The buyers are not interested in fixer uppers either; they’re buying new construction homes worth upwards of $1 million. This is extremely good news for sellers in California. Renters waiting for home prices to drop might change their mind if presented with the right opportunity. This is why knowing the front line experience along with specific market research is so important. Strategic Sales and Marketing offers a variety of real estate sales and marketing services. Our team has years of experience working with the real estate industry and understand the steps required to identify and connect with potential buyers. Please contact us for more information about how we can help your community outperform the market.