A Real Estate Boom is Happening in SoCal- Thanks to the Pandemic
Posted by Techyscouts | Posted on 03/14/2021
The Real Estate Market is Thriving, Despite Uncertain Times.
If You’re Thinking of Buying LA Real Estate this Season, Here’s the Latest.
Home sales in Southern California have driven a surge last month compared to December 2019’s numbers, continuing a residential real boom, even in a crippling economy because of the pandemic. People now have more money than living space, and with bargain-basement mortgage rates, this has led a surge in the market.
The LA Times reports that, with data released by real estate firm DQNews, the median home sales price in Southern California rose by 10.1 percent from Dec. 2019 to $600,000 in Dec. 2020, with sales rising 29 percent in 2019.
Experts believe that, due to the pandemic, that people’s finances have remained stable, and are looking for more space since moving work to home and workplaces have closed. Low-interest rates are also rising, thanks to a new Federal Reserve policy that aims to energize the economy.
Mortgage lender Freddie Mac has even reported that the average rate on a 30-year old fixed mortgage has dropped by 3.6 percent from last year, hitting 2.77.
From calculations made by Redfin, a person buying a $600,000 house with a 20 percent down payment would be saving $217 a month in today’s rate. Their monthly mortgage payment would be $2,675 instead of $2,892 (a price at last year’s rate), including property taxes and insurance.
Prospective buyers, however, are finding out that demand has risen, which has made it a competitive home sales market. With this, bidding wars are at an all-time high.
Experts and industry watchers believe that 2021’s sales will see a smaller bump than in 2020, when prices jumped into the double digits recently. December’s median price didn’t budge from this last November, so both months fell 2 percent short from September’s height.
However, experts still believe that it’s too early to tell if the real estate market will lose steam this year, since prices rise and fall on a monthly basis. It’s never uncommon for real estate agents to boast in bidding wars.
Fortunately, John Burns Real Estate Consulting predicts that this year will be sturdy for home sales in the major SoCal markets, foreseeing price increases of 7 to 10 percent, compared to 2020’s estimated increase from 9 to 14 percent.
While vacancies are rising and rent is slightly lower, eviction cases are rising and are expected to double statewide in the next year.
Contact Mike Millea
Surprised to hear that the real estate market is doing exceptionally well during the pandemic in Southern California? Contact Mike Millea if you’re considering purchasing up real estate this season! We are happy to discuss with you on what you are looking for and help you make the right investment for your future. We are happy to work with you!