Top Predictions for California Housing Market in 2021 and BeyondAugust 26th, 2021 by Administrator
Many investors and real estate agents feared a housing market crash in California after witnessing an initial negative impact, and sales dropped at the time of the COVID-19 pandemic. There is no doubt that things were quite on the wrong track for housing markets in the state, but new data has shown a sense of relief as the market has recovered a bit at the beginning of 2021.
If we go through the California real estate market statistics for the year 2020, we will see that the market has started showing some positive trends in the latter half of the year. With the market doing well, house prices continue to rise, and housing inventory continues to drop at the same time. Situations may differ from one city to another, but investors are earning more returns on investment in the California real estate market.
As things are getting better and the market is doing well, here’re the top predictions for California real estate market in 2021 from market experts and real estate agents:
Home prices will continue to rise
Current real estate market statistics reveal that home prices in California rose in the latter half of 2020 and starting of the year 2021. This trend seems to be continued in 2021 and beyond as the home prices have surpassed $700k for the first time in the Golden State as per the C.A.R. (California Association of Realtors) reports. Trends are very clear despite COCID-19, the market is not slowing down and hence the home prices will continue to rise as per the latest reports.
Low mortgage rates will ease the affordability issue
If the home prices continue to rise, buying a house in California will become less affordable for many residents. It will be not easy for a lot of investors to spend their life savings on a property that they couldn’t afford with rising prices. However, trends for mortgage rates in California housing markets are positive in favor of buyers that could be a boost for residents who want to own a house in the Golden State. Lower mortgage rates are expected in 2021 and beyond that will ease the affordability issue for many interested buyers. Many experts are also expecting that interest rates will remain low and even drop to as low as 2.9% by the end of 2021.
Home Sales will increase
As per the C.A.R. report, home sales went up in the latter half of the year 2020 at a rate of 14.6% year over year (YoY). This trend will continue to grow in 2021 and beyond despite the home prices are going up. However, an increase in home sales is a key reason why home prices continue to rise.
Apart from these predictions, experts are also forecasting that home insurance in California will become more expensive. The California real estate market will remain a seller’s market if you want to earn maximum returns out of your investment. If you are confused about how the housing market in your city in the state of California will perform and if it is the better time to invest, contact a professional real estate agent in your region to make a well-informed decision for property investment.