Across the United States, home owners are gaining more confidence in selling and purchasing real estate, but there’s one thing still standing in their way: inventory. The low levels of inventory in most major cities have shot down the opportunity for many to make new purchases, putting the success of the real estate market almost solely in the hands of home builders. According to the National Association of Homebuilders (NAHB), home builder confidence is up for the eighth consecutive month nationwide.
The NAHB publishes its Housing Market Index based on a survey that determines the confidence of builders by asking questions about the conditions for the sale of newly built homes today, conditions expected in six months and prospective new home buyer traffic. The organization collects answers that are weighed out based on a formula that results in a number between 1 and 100. Readings above 50 suggest that the market conditions are favorable for builders.
The HMI for January was marked at 56, which is a point lower than December but it is the eighth month of readings above 50.
With buyer traffic at multi-year highs and constantly increasing demand in Southern California and other areas, home construction and new home sales are expected to soar in the next six months. However, in an effort to not repeat past mistakes, home builders will construct at a much steadier pace than before the bubble burst in order to maintain healthy demand.
Local Impact in Southern California
In Corona Del Mar, the inventory of homes for sale dipped dramatically in the latter part of 2013. For the majority of the year, the weighted 90-day average remained consistent between 60 and 70 properties. Between September and November, the seven-day average of properties on the market went from more than 78 to less than 34, bringing the weighted average down drastically. As of January 24, there were 44 properties on the market.
As of November 2013, the median single-family home value began to dip slightly after it steadily increased throughout the year from less than $2.7 million to about $3.2 million in September. The median value is still fairly high according to the 90-day weighted average, which sits at $2,944,654 as of January 24. However, the 7-day average shows a sharp dip at the start of the year to about $2.5 million.
While still being in the slow winter season right now, home owners in the area can expect demand to go way up in the spring. Economists believe this spring is going to be a big one for real estate in the entire country, and locals in Corono Del Mar should see no different.
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(all data current as of 10/22/2017)
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