What’s ahead for California’s real estate housing market? Expect moderate home price increases due to lack of inventory, higher mortgage rates that may taper this fall and an increase in the number of trade-up buyers. That’s the word from Leslie Appleton-Young, vice president and chief economist for the California Association of Realtors (CAR), who recently spoke in El Cajon to members of the Pacific Southwest Association of Realtors (PSAR), a San Diego-area trade group for realtors.
Appleton-Young’s take on the state of California’s housing market also included the following: the share of equity home sales – or non-distressed property sales – will continue to expand (equity sales in June comprised four of every five sales, thanks primarily to a drop in distressed sales); depressed buyers are getting more selective while homebuyers already in the market will remain aggressive in their pursuit leading to bidding wars and multiple offers on the most attractive residences; credit restrictions are easing, which represents more opportunities for loan modifications and refinances; and, price appreciation is cooling investor demand, possibly causing more flipping.
“I believe we’re watching the continuation of a slow recovery,” Appleton-Young said. “When equity home sales make up four of five sales, reaching the highest level in nearly six years, this indicates a healing of the market. Rates will remain good, but not as good as they were.”
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