Like the rest of the nation, California is still feeling the aftermath of the Great Recession. However, many economists are confident that home values will continue to increase at a more stable pace. In California in particular, there are three major signs pointing to a promising future for the housing market.
According to the California Association of REALTORS®, housing affordability held steady in California during the fourth quarter of 2013 after six consecutive quarters of declines. In many cities in the Golden State, home values upticked for the first portion of 2013, including Los Angeles and San Diego, but then saw prices depreciate slightly in the latter half of the year.
At the same time, investors are pulling out of the market as it isn’t as lucrative as it was when home values were down way below where they should have been. This is going to leave home buyers with less competition from investors that show up with cash in-hand. Due to the lower number of distressed properties on the market and rising home values, investors are much less likely going to play a role in the home buying process.
While many areas throughout the nation have seen a rough start to 2014, it’s important to note that this is typically the slow buying season. With spring right around the corner, both buyers and sellers may be in store for some better luck looking for available real estate in Southern California.
“Two of the bigger questions hanging over the housing market right now are: ‘How much pent-up demand is left out there?’ and, ‘Will inventory skyrocket this year as more owners take advantage of the price run-up?’” said John Walsh, DataQuick president.
What to Expect for Home Prices In The Future
The Home Price Expectation Survey, conducted by Pulsenomics, surveyed more than 100 real estate experts, economists, and investment and marketing strategists about where they think home values are going to go over the span of the next five years. The predictions were then averaged to determine the results.
Experts believe that home values will increase 4.5 percent in 2014, which is promising for two reasons. Not only does this show that homes will increase in value, but they won’t increase as much as they did in 2013. Over the next five years, experts believe that home values will uptick at an average annual rate of 3.94 percent, and by 2018 the cumulative appreciation will be 19.7 percent. And even conservative economists believe that home values will increase by 11 percent by 2018.
In a couple months, home owners in Southern California will be in the midst of the spring season, which will set the tone for the busy buying season ahead.
If you’re interested in purchasing luxury real estate in Southern California, we would love the opportunity to show you this exclusive beach town. Please contact our team of luxury property experts.
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(all data current as of 10/22/2017)
Listing information deemed reliable but not guaranteed. Read full disclaimer.