California real estate market has seen a double digit increase in price of the homes from 2011 to 2012. There’s a concern if the current boom is another speculation that hit the market in early 2000. What we know is that the conditions are much healthier than one experienced in the mid 2000.
Current housing finance are requiring buyers to be more responsible. More buyers are coming in with larger down payments. There is less “zero down payment” which we saw years back. The adjusted rate mortgage (ARM) is down significantly. Buyers offering “all cash” on home purchases have increased making it 3 times of what it used to be in 2006.
Both interest rates and costs of financing continues to be at all time low. These two factors have contributed in making housing a little more affordable. According to CAR (California Association of Realtors), the housing affordability has quadrupled since 2006.
CAR predicts, as the economy improves slowly, the median home price of California will increase slightly in 2013. With tight listing inventory in many regions, competition between buyers are expected to remain high. Multiple offers and above asking price for homes may become a normal cycle for 2013. Seven months supply of inventory in considered a balanced market. In October, CAR reported the supply of inventory to be about 3.1 months, the lowest since 2005. According to CAR’s 2012 Annual Housing Survey, six out of ten offers ended in a multiple situation. With low inventory and high demand, the price of homes can expect to rise this year.
In California, the existing home sales are up 5.9%, and the statewide median single-family home price is expected to increase 5.7% to $335,000. CAR noted that the housing markets in Orange Country and the Bay area experienced a double digits year-over-year gain in sales. With low inventory and high demand, the price of homes can expect to rise this year.
Are you thinking of buying or selling a home in Pasadena and Altadena area? Call Ellie Viray at 626-524-4136 for a market evaluation/consultation. Ellie Viray is a full time Realtor, bilingual in Japanese and lives in Altadena, California helping people MOVE forward to reach their real estate goals. Search for all Pasadena and Altadena active listings here!