The Southern California housing market has been on a nearly seven-year tear, with prices in many communities reaching all-time highs.
But now, as mortgage rates rise, the boom appears to be fading.
Sales are dropping; inventory is swelling; more sellers are scaling back their ambitious asking prices.
Is California in a real estate bubble?
The answer is: Not for the reason you think. As a real estate broker who’s been plugged into the Southern California housing market for over 15 years, I have experienced firsthand that the normal culprits — the market bubble, skittish homebuyers and a lack of demand — are not the current cause of the pricing quandary.
Should I invest in real estate?
Many financial experts warn against borrowing money to purchase investments. You should consider this before you purchase a piece of investment real estate. If you can’t afford to pay cash for the home, at the very least, you should be able to afford the mortgage payments, even without rental income.
Will housing market go down?
The bad news is that it’s likely only going to get worse in 2019. According to Trulia, worsening housing affordability will slow down home buying activity next year. Rising mortgage rates will take a bite out of affordability on top of an already supply-constrained and high-priced housing market.”
Will houses go down in California?
The tax bill changes limiting home equity loan interest and property tax deductions, lack of affordable housing supply, wage stagnation and higher interest rates are all problems California shares with the rest of the country, Sussman points out. “California is California. People are always going to want to come here.
Will housing prices go down in 2020?
“Rising mortgage rates will set the scene for the housing market in 2019,” said Aaron Terrazas, senior economist at Zillow. “They will affect everyone, driving up costs for home buyers and creating more demand for rentals. Even current homeowners could start to feel locked into their mortgage rates.”
Will housing prices go down?
While that’s the lowest mortgage rates have been since September, they are still higher than a year ago. “This is an extremely mortgage-rate sensitive housing market.” Realtor.com only expects the national median home price to increase 2.2% next year and for sales to drop 2%.
Are we in a housing bubble?
The rising prices of houses don’t tell us that we are in a bubble. A bubble would be buying—and building—houses just to flip them. With supply limited, prices go up. The national housing price measures are pushed up by the artificially-induced shortages in some communities.
Photo in the article by “Wikimedia Commons”