Homes in Southern California are selling like hotcakes, with record selling times and prices in some local markets.
After watching prices climb for five years, some home buyers are feeling that they may miss out on an opportunity to purchase if they don’t act fast; as a result, homes that are attractive and priced well are frequently selling with multiple offers for above asking price.
In this hot summer market, it’s not uncommon for buyers to make offers on homes solely based on the Internet listing.
Yet how long will this market continue? Will prices keep rising?
For the first time in many months, the inventory of homes for sale in Long Beach and Lakewood increased.
Are homeowners who’ve been sitting on the sidelines waiting for the peak of the market finally deciding that now is the time to sell?
Here’s a look at the latest numbers in Long Beach and Lakewood:
The median time on the market in June was just 11 days, 75% faster than in June 2016, according to the latest numbers from Pacific West Association of Realtors (PWR).
The median sales price for a single family home in Long Beach jumped to $619,500 in June, up 5.9% from June 2016, according to the latest numbers from Pacific West Association of Realtors.
Meanwhile, for the first time in a year, the inventory of available homes for sale increased. While still well below this time last year, the 2.4 month supply of homes for sale in Long Beach is higher than it’s been since October 2016.
Homes have also been selling quickly in Lakewood, with the median time on market at 11 days as of June.
The median sales price in Lakewood was $561,470 as of June 2017, up 8.9% from the prior June.
As in neighboring Long Beach, inventory picked up a little in June, though it was still lower than this time last summer.
A number of economists recently interviewed by the Orange County Register said they expect that home prices will continue to rise for the next two years, possibly longer.
However, the projected price increases range between 2.5% and 7% a year, depending on who you talk to and what area you’re considering.
While the continued increases have some folks starting to talk about whether we’re in a bubble, several economists told the Register that they don’t think so.
“The reason that (2005) ws such a huge nasty bubble is because a lot of people were borrowing money they couldn’t afford to pay back. … Now credit is hard to get. Credit is locked down,” said Christopher Thornberg, a founding partner of Beacon Economics and former UCLA economics professor.
The current market is something of a perfect storm for homeowners who want to sell and buy. As sellers, they are in the driver’s seat and as buyers, they are able to take advantage of today’s low interest rates. Most economists expect that interest rates will be increasing over the next few years. The combination of higher interest rates and higher prices could put the ideal dream home further out of reach.