“The housing market has been performing better so far in the second half of 2019, with both sales and prices up as mortgage rates remain near their three-year lows,” said California Assocciation of Realtors President Jared Martin. “Additionally, pending sales have been on an upward trend with a near 10 percent increase over a year ago, making it the largest gain in three years. The solid improvement in pending sales suggests that the market may see more sales gains in the coming months.”
Year over year, median home prices have risen significantly in Southern California, with Los Angeles County prices rising 7.4% over the last 12 months and San Diego County home prices rising 1.1%.
The persistent lack of supply is a constant factor that affects the California housing market and it may never be remediated. That means that home prices and also rent prices might persist high as well. Active listings fell for the fifth straight month, down 22.5% from last November. The sales to price ratio stands at 98.4%, up .5% from last November. Days to sell dropped to 25 days.
In what some expert economists forecast to be rough times ahead, it seems it’s going okay though. If some projections of a growing US economy from 2020 onward come true, home prices may continue to rise in 2020.
The California Association of Realtors reports that California sales of homes priced between $500k and $1 million rose about 15.5% on average. Homes above $2 million dropped 3.2% and condominium prices rose to $473,000.
Key Factors in California’s Housing Market Growth
1. High employment and rising wages create fuel, rising home prices and rents.
2. Demographics — lots of millennials buying and baby boomers selling.
3. Interest rates continue to be low.
4. Migration — slowed and keeps prices stable.
5. Cost of business — extremely high.
6. Home prices — extremely high and rising.
7. Multi-family new construction — total construction in 2019 was down 8%.
8. Interest rates are stable, wages are rising and mortgage requirements are reasonable.