Real estate is a very local business and when you’re considering buying or selling a home, it’s important to focus not on the national trends, but on what’s going on in your state, city, neighborhood, and even on your street. Past trends and current statistics can assist you in planning. Here’s a look at the real estate market in California as well as several local communites.
California Real Estate Market
2015 saw prices and home sales increase across California and the housing market is expected to continue improving in 2016, according to the California Association of Realtor’s market forecast. However, the current shortage of inventory and crimp in housing affordability is also expected to persist.
“Solid job growth and favorable interest rates will drive a strong demand for housing [in 2016],” said CAR President Chris Kutzkey. “However, in regions where inventory is tight, such as the San Francisco Bay Area, sales growth could be limited by stiff market competition and diminishing housing affordability. On the other hand, demand in less expensive areas such as Solano County, the Central Valley, and Riverside/San Bernardino areas will remain strong thanks to solid job growth in warehousing, transportation, logistics and manufacturing in those areas.”
Low Interest Rates and Slow Price Appreciation Rates
While some economists have projected a greater increase in interest rates, CAR projects that the average for a 30-year, fixed mortgage interest rate will rise only slightly to 4.5%, which is still at a historically low level. The California median home price is forecast to increase 3.2% to $491,300 in 2016, following a projected 6.5% increase in 2015 to $476,300. This is the slowest rate of price appreciation in five years.
“The foundation for California’s housing market remains strong, with moderating home prices, signs of credit easing, and the state continuing to lead the nation in economic and job growth,” said CAR Vice President and Chief Economist Leslie Appleton-Young. “However, the global economic slowdown, financial market volatility, and the anticipation of higher interest rates are some of the challenges that may have an adverse impact on the market’s momentum. Additionally, as we see more sales shift to inland regions of the state, the change in mix of sales will keep increases in the statewide median price tempered.”
2016 California Housing Forecast
|2016 CALIFORNIA HOUSING FORECAST|
|SFH Resales (000s)||416.5||422.6||439.8||414.9||383.3||407.5||433.0|
|Median Price ($000s)||$305.0||$286.0||$319.3||$407.2||$447.0||$476.3||$491.3|
|Housing Affordability Index||48%||53%||51%||36%||30%||31%||27%|
|p = projected
f = forecast
Long Beach Real Estate Market Update
The Long Beach real estate market is hot. The median home sales price in Long Beach was $565,000 last month, which is 21.5% higher than it was the previous December. As you can see from the graph below, the market has experienced some seasonal fluctuation based on supply and demand.
Right now in Long Beach, demand far exceeds supply, making this a very strong seller’s market and an optimum time to list a home. As of December 2015, there was only a 1.5 month supply of homes for sale citywide, which is far below the 4.9 month supply Long Beach experienced just a few years ago.
Lakewood Real Estate Market Update
Like Long Beach, Lakewood has experienced significant price increases. Last month, the median home price in Lakewood was $545,000, which is 24.4% above the median price for December 2014. Although the median price finished the year above its level last year, it was below the peak it saw last August, showing just how supply and demand along with other market factors can cause price fluctuations.
One thing driving prices in Lakewood right now is the extremely tight inventory of homes for sale. As of December 2015, there was only a 1.5 month supply of homes. A “balanced market” is typically one with a 4-6 month supply of homes for sale.
Signal Hill Real Estate Outlook
The median sales price for homes on the market in Signal Hill was $410,000 in December 2015, which represents a 43% decline from December 2014. Price trends in Signal Hill have been somewhat volatile, with fluctuations caused by supply, demand, and other economic factors. For buyers, Signal Hill may represent a good opportunity based on the fact that interest rates remain low and that prices in Signal Hill haven’t shot up the way some other communities have experienced.
The inventory of homes for sale in Signal Hill is higher than in most surrounding communities, with a 3.6 month supply of homes for sale in December of 2015. This is still quite a bit lower than the peak of 7.8 month supply in September 2014.
Seal Beach Real Estate Market Update
Like Signal Hill, Seal Beach hasn’t seen the rapid price escalation that Long Beach and Lakewood have experienced. The median home sales price in Seal Beach was $960,000 last month, which is 13% below its level in December 2014. Other than a spike in December 2012, home prices in Seal Beach have remained relatively stable for the past several years.
Despite the reasonably steady prices, the inventory of homes for sale in Seal Beach remains relatively low, with a 2.2 month supply as of last month. If you are thinking about selling your home in Seal Beach, now is a good time to do so as many buyers are looking to take advantage of today’s low interest rates.
Cypress Real Estate Market Update
The median sales price for homes in Cypress was $605,000 in in December 2015, which is slightly down from December 2014. The median home price has been increasing overall since 2012 with a spike to $640,000 in May 2014.
As prices have been going up in Cypress, inventory has been going down. As of last month, there was a 1.6 month supply of homes for sale, far below the peak of 5.3 months’ supply in January 2012. The lack of supply, coupled with high demand, makes this an opportune time to list a home.
Los Alamitos Real Estate Market Update
The median home price in Los Alamitos was $780,000 in December 2015, which is slightly down from the same month last year and the median home price spike to $925,000 in October 2015.
Despite the fact that home prices have experienced some peaks and valleys, Los Alamitos is currently experiencing a seller’s market based on supply and demand. As of last month, there was just a one month inventory of homes for sale, which is 58.3% below its level in December 2014.
As you can see, trends vary significantly from city to city, even when the cities are located right next to each other. Similarly, price trends and inventory vary significantly from one neighborhood to the next, and those trends can greatly impact the most optimal timing for buying or selling. If you’d be interested in finding out what’s going on in a particular neighborhood, give us a call today. If you’d like a custom report on your home’s current value, simply fill out the form below.