Trends In The California Real Estate Market To Watch

Posted on Saturday, May 2, 2009 in Deals

Historically, the real estate trends of California have always been the precursors for the rest of the country. This is why leading players of the real estate market keep a close watch on the Golden State’s real estate market conditions.

And whether you are a first time homebuyer, debating the viability of building your dream house in San Diego, or a real estate investor looking to sell condominium units in Los Angeles, you certainly want to know: When is it the optimum time to buy or sell?

Purchasing a house is a major investment. With judicious planning, this valuable asset will appreciate with each year.

How do you get the big picture? Fortunately, real estate trends are predictable because these develop over a long period, unlike the stock market, which is rather volatile.

The first thing you will need to do is to read and track real estate articles: online directories of California real estate articles, the market reports of the California Association of Realtors or the California Building Industry Association, and the briefs created by housing analyst companies.

Once you have identified the following key indicators you will have a better grasp of the general trends in California’s real estate market.

When interest rates rise, buyers shy away. Conversely, lowered interest rates attract more buyers.

This year, interest rates in California are on an upswing. The higher the number of building permits issued, the higher the demand for houses. In the law of supply and demand, when there are few buyers, real estate prices fall.

Another factor to consider is the growing inventory of available home listings in certain counties, which is changing the market dynamics. What was once a sellers market is slowly turning into a buyers market.

Loan Defaults refer to the failure of homeowners to pay their monthly mortgage fees. One downside to this is that many Californian homeowners are choosing to have a bad credit report, rather than to keep paying fees for a home whose value has been inflated by as much as 20 percent more.

When foreclosure sales are on an upswing, consumer spending is down and consumer debt levels have risen. In the real estate market, this has meant that many financially strapped homeowners are selling their homes at lower prices.

The other contributable factors are inflation, the rising prices of gasoline, federal budget deficit, and interest rates.

Concurrently, these key indicators confirm that although home sales levels in California are falling, the demand for houses remains strong and steady. Always do your due diligence before undertaking a purchase of property in California.

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