Data from the California Association of Realtors (CAR) reveals that the number of homes available for sale in California is increasing. In fact, last month marked the biggest surge in over a year. This comes as home prices continue to rise in the state.
According to CAR, active listings have surged for the second month in a row when compared to the previous year, signaling the start of the busy spring season for home sales. Additionally, new active listings have also seen a double-digit increase. The median home price in California has reached its highest point in seven months, with a significant jump of almost 8 percent to approximately $855,000 in March compared to the same period last year. Prices have also risen by 6 percent compared to February.
According to Jordan Levine, the chief economist of CAR, selling a home in California is currently a lucrative opportunity. Levine stated in an interview with Newsweek that approximately half of the homes are now being sold above the listed price, indicating a strong market. Additionally, he mentioned that the overall prices of homes are also on the rise.
According to the data, sellers are experiencing quicker sales for their homes. Last month, it took an average of 19 days to sell a single-family home, which is a decrease from 24 days compared to the same time last year.
Sales experienced a decline of approximately 8 percent on a monthly basis, and a decrease of over 4 percent compared to the previous year. Levine attributes this in part to the higher mortgage rates, which are causing sellers to hold onto their low-interest home loans. Consequently, this has resulted in a reduced supply of homes in the market.
According to the expert, the current situation has led to a significant decrease in inventory. He points out that there are now fewer homes available for sale compared to the spring of 2020, when the economy was completely shut down.
According to him, the scarcity of available homes is the main reason behind the high prices of houses in the state. He explains that the increased competition for limited housing options has led to the surge in prices.
Mortgage rates have recently increased to approximately 7 percent, posing a challenge for prospective homebuyers in terms of affordability. According to the Mortgage News Daily’s tracker, rates slightly decreased to 7.41 percent on Wednesday, following a previous increase to 7.5 percent the day before. This marks the highest level since November.
According to Levine, a recent report by CAR reveals that the affordability index in California indicates that a staggering 85 percent of state residents are no longer able to afford a home with a median price.
According to Newsweek, he mentioned that not as many people are able to enjoy the benefits of homeownership.
According to Levine, the robust economy in California is enabling individuals to compete for the limited number of homes available in the market.
According to the expert, our economy remains robust and the unemployment rate remains low. Additionally, a significant number of high-income jobs are being generated, which creates a demand for housing. However, due to limited inventory, the housing market is under pressure. The expert further highlighted that the rising prices of homes, driven by high-income earners purchasing primary residences, have made it increasingly difficult for average individuals to afford homes within a medium price range.
According to him, the significance of this inventory shortage cannot be emphasized enough. Despite interest rates being at 7.5 percent, the demand is still surpassing the supply, resulting in the continuous increase in prices.
