According to The LA Times, the median home price in Los Angeles County, has reached the same peak as it was right before the 2007 housing market crash. The rest of Southern California has followed, with San Diego County surpassing its previous all-time high. This marks a significant event in the housing market’s recovery, but not necessarily for affordability.
In the most recent report from April 2017, the median price for a home in San Diego County climbed 7.4 percent to $525,000.
This increase might sound like great news for homeowners as their houses’ equity is increasing again, but the prices also seem to be going up faster than incomes. So in a place where houses are already known to be expensive, buying a home is getting even pricier.
Henry Vega, a real estate broker with Redfin, told the Times, “There is a general feeling that prices are too high, [but] there is an urgency that if we don’t buy now, we are just not going to be able to buy in the next three or five years.”
But Chris Thornberg, a founding partner of Beacon Economics, reassures that the current market is expensive, but nothing major to panic about. He says that the steady growth of five to six percent that we see right now, instead of the double-digit growth that happened before the crash, tells us that the current market is stable. “It’s not a bubble,” Thornberg said, according to the Times. “It doesn’t smell like a bubble. It doesn’t walk like a bubble.”
Rather, Steven Thomas, an analyst with ReportsOnHousing.com thinks it is just a matter of supply and demand. “The lower ranges do not have enough supply, and demand is through the roof. Buyers need to sharpen their pencils and write strong offers to purchase,” he said, according to the Orange County Register.
According to the article by the Times, instead of careless loans driving the upswing like in 2007, economists credit an improving job market, historically low mortgage rates and a shortage of homes for sale — in other words, a healthier rise due to mismatched supply and demand.
So, spring home buying (and selling!) season is looking especially hot this year with no end in sight. It’s a competitive market right now as newer, move-in ready homes are selling in as little as a week, sometimes well over the asking price as multiple offers come in. Open houses are packed. Buyers have to be on their A game.
This is exactly what Priscilla Rael-Albin, broker-owner of Re/Max Discovery in Anaheim Hills told the Orange County Register. She has this advice for buyers: “They have to have their ducks in a row. They have to be ready to win. “They have to have their finances in order. They have to have their down payment accessible. They have to be pre-approved (for a loan).”
This is also a current trend across the country. The Case-Shiller index, an important gauge of housing prices, shows that in March 2017, previously-owned houses sold at the fastest pace in over a decade.
Check out the original article from The LA Times: