Southern California is experiencing one of the most active real estate markets in years.
The housing market offers one of the few signs of strength in the U.S. economy, which is still struggling with the Coronavirus pandemic. Home sales surged nearly 25% in July, to the highest rate since 2006. According to the National Association of Realtors, sales jumped 24.7% from a month earlier to a seasonally adjusted annual rate of 5.86 million which is the strongest monthly gain recorded in over 50 years.
“What is currently occurring in the Southern California real estate market is simply unprecedented,” says Michael Bianchi, Vice President and General Manager for Pacific Sotheby’s International Realty’s Orange County offices. “It’s potentially a once in a lifetime opportunity for both sellers and buyers.”
The number of homebuyers in San Diego County, Orange County, and the Coachella Valley far surpasses the number of properties for sale, while new home construction remains far below demand. Pent-up demand and lack of inventory combined with historically low-interest rates have resulted in rising home prices, bidding wars, and quick sales — all creating tremendous opportunities for sellers to sell for top dollar in record time while at the same time making purchasing more affordable for homebuyers.
Coronavirus is no longer suppressing demand. The number of homes that came on the market in July 2020 is higher than we saw in July 2019. In fact, the pandemic is shaping demand for homes as more Americans are adjusting to social distancing, remote learning, and work-from-home flexibility. According to a recent article published in the Wall Street Journal, buyers are ready to move farther from cities, now that many workers aren’t commuting every day. The pandemic has spurred some households to live closer to family, or somewhere that offers more space with so much time spent at home.
There is no indication that demand will diminish with interest rates from averaging at 2.25% to 3.5%. Many economists expect mortgage rates to remain low and possibly trend lower. More homebuyers are prepared to purchase. According to Realtor.com, nearly two-thirds of homebuyers say that they have been able to save more money for their down payment due to the Covid-19 shelter in place orders in Spring. Additionally, Millennials a group that had postponed homeownership over the past decade are taking advantage of these low interest rates to jump into the housing market.