Southern California Coldwell Banker Realty President, Jamie Duran, notes the following regarding the Southern California Real Estate Market as of September 30, 2021.
- Even as the pandemic persists and economic uncertainty rises, the housing market, although showing signs of some normalization, remains remarkably resilient.
- Beginning in July of 2020 through today, the market began rebounding from the pandemic with a flourish and show no signs of letting up.
- Buyers are still faced with crowds of interest on just about every home that hits the market.
- Multiple offers are still the norm and homes are selling in record short periods of time.
- Substantial price increases across Southern California are beginning to make the goal of becoming a homeowner harder and harder to reach.
- Southern California continues its trend of the current demand being higher than the current active inventory, meaning that the last 30-days of pending sales activity is higher that the number of homes available to purchase today.
- According to the Multiple Listing Service the expected market time (the amount of time between hammering in the FOR-SALE sign to opening escrow) is 20 days. It has remained below 45-days since the beginning of June 2020. Anything below 45-days indicates an insane, scorching hot housing market where buyers are tripping over themselves to be the first to see a home that just hit the market, multiple offers are the norm, and homes regularly sell above their list prices.
- It is more important than ever to have a trained, full-time, experienced Realtor to represent your interests in what is usually the largest financial transaction of your life.
Current inventory levels remain an issue:
- Southern California began September of 2021 with 36,676 active listings 53% below pre-Covid levels of August of 2019. San Diego County was 68% below 2019 levels.
- New listings continued their two-month downward trend. This month 25,673 new listings hit the market. This was an 13% decrease from the prior month of August 2021 when 29,550 homes went up for sale.
- Closed sales of 23,523 were under 10% less than last month and September of 2021 throughout Southern California.
- Active listing inventory remained flat with the prior month but remained well below typical inventory levels at this time of year. September active listings were 52% and 36% lower than inventory levels in September of 2019 and 2020 respectively.
- The average selling price for a home remained above one million dollars at $1,006,294 for the sixth straight month since reaching that milestone in April.
- Despite the 10% decrease in home closings to the prior month, the decrease in new listings resulted in an increase of inventory levels of only 800 homes.
Duran further elaborates that many buyers are kicking themselves and wish that they could have purchased a year given record appreciation. Knowing where the market is today and where it is headed from here is very important. When buyers qualify to purchase and are comfortable with the monthly payment, they can be happy to know they are taking advantage of historically low interest rates and that home appreciation should endure for the foreseeable future. As the pandemic and its variants have resurfaced recently, sellers are still holding, but as restrictions lessen, she anticipates that we will eventually see more inventory.
The High-end Luxury Market is Strong:
- In the last twelve months ended 09/30/21, sold volume of homes greater than $10,000,000 once again almost doubled to $16,6665,996,980 from $8,984,580,376 in the prior twelve-month period.
- Volume of homes sold greater than $5,000,000 also almost doubled in the last twelve months ended 08/31/21 to $44,917,493,490 from $23,147,673,704 in the prior twelve-month period.
In conclusion, Duran stresses the importance of four key elements that will impact the Southern California real estate market into 2022:
- As pandemic travel restrictions dissipate, the re-emergence of foreign buyers further increase demand, particularly at the high end.
- There will continue to be a shortage of homes as new construction has lagged demand and population increases for around 15 years. Some builders have even flipped “for sale” projects into “for lease” projects anticipating further price increases.
- A good part of the inflationary pressures we are now beginning to feel are supply side driven which would make them potentially more curable.
- There is a larger build up of savings in the world than ever before.