California’s Housing Market Forecast
In the midst of the unexpected Corona Virus pandemic and temporary work shut down, buyers are wondering if housing prices will fall and stay lower throughout 2020. Landlords are concerned about vacancies, rental income losses, and further rent payment defaults.
Buyers and rental property investors are wondering if the California housing market will take a lasting hit. The forecast has to be for a good recovery. China is recovering quickly from its pandemic.
Housing demand in California remains strong against severe shortages, with the tech sector looking good for employment. Agriculture and tourism will return because California is too important to everyone. If home price and rent prices should fall, it would only encourage fewer people and businesses to leave the state.
Prices rose in January and February in San Francisco, San Diego, Los Angeles, Oakland, and Sacramento. Now the California economy is taking and March’s numbers might be subdued. There’s nothing landlords and property managers can do about that. The key is that the economy will return to normal and you have a chance to improve your business right now.
How Far Could Housing Prices Fall?
How far will home and rental prices likely fall? Experts seem to be of the opinion they won’t drop far. It would take an extended period before buyers give up, and where mortgage defaults occur. New construction was rolling along nicely, but this may have slowed.
China’s battle with Covid 19 is coming under control. They’re reporting few new cases of the virus. If the US follows a similar timeline, it might be only a month or two until the disease passes. But no one’s sure. Reports of 80,000 jobless claims in one day in California is alarming.
CAR’s California housing market stats for February are out. Seems like it’s all in the rear view mirror now, but demand was strong and that might tell us that when the Covid 19 pandemic is done, California’s markets will come alive again.
“As the coronavirus pandemic worsens, the housing market is expected to decline precipitously in the coming months, particularly in counties and cities with a shelter in place mandate” said 2020 C.A.R. President Jeanne Radsick
Strong Market in California
Low interest rates and strong employment lead to some stellar sales results in February. Single detached and house prices in most counties grew. Existing, single-family home sales totaled 421,670, up 5.9% YoY. House prices were up .8% from January and 5.9% from last February. Sales rose strongly at 6.6% from January and 5.9% YoY.
California Home Prices
Los Angeles County had some hot zones in February. LA’s median home price drop 6% month over month and 7.3% YoY. Homes in Orange Country grew 2.9% month to month to $880,000 and sales rose 11.5%. Yoy that was a 11% rise in price and 34% rise in sales. San Bernardino saw a2.9% rise in price to $329,000. And in Riverside, home price grew 3% to $428,00.
Housing Crash Predictions?
Hoards of millennials, working poor, and homeless people are praying for a California housing market crash, but prices aren’t crashing.
With such strong demand driving the whole California housing market it’s unlikely the Corona Virus induced crash will be short lived. The optimism in the US is much to strong, and the government is committed to strong growth for the next 5 years. In fact, with the extra economic activity spawned by housing construction and household formation, there is upward price pressure.
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