Stacey 02 Apr 2022

Southern California is no stranger to a hot housing market. Residents are used to high prices and a challenging hunt to find their ideal property. However, current conditions are fueling an unusual sense of urgency among buyers worried that they might miss the opportunity to find the home of their dreams if they wait too long.

Multiple factors have combined to create a highly competitive market for houses all over the Southland, one that is expected to only get worse as the spring homebuying season continues. Historically low-interest rates have made purchasing property more attractive for many in recent years. Then, when the pandemic hit, the sudden adoption of remote work by many companies enabled workers to move out of higher cost of living areas to suburbs where they could find larger and/or more affordable homes. This heavy surge in demand has collided with a lack of available inventory in the region. The result has been soaring prices with no expectation they’ll be falling anytime soon.

How significant is the difference between the pre-pandemic market and now? In February 2020, Los Angeles County’s median home price was $621,000 and Orange County’s was $748,000, according to the LA Times. [i] These days, the OC Register reports, the median home price in Los Angeles County is $800,000, an increase of 28% from February 2020, while Orange County’s median has hit $985,000, up 31%. [ii] At the same time, inventory is incredibly low—for example, only 1,500 homes were for sale mid-March in Orange County, compared to an average of 5,400 homes for sale at this time over the previous six years.

Fueling the sense that buyers must act now is the recent rise in mortgage interest rates. While still low, the increased rates have sparked fears that an upward trend could signal the end of the ultra-low rates that have helped to offset the impact of high home values. The intense competition for available homes has resulted in multiple offers per property, offers well above the asking price, and concessions on contingencies as buyers angle for an edge to differentiate their bid.

Snapshots of Area Trends

The countywide averages cover a multitude of areas that differ in property availability and market conditions. Long Beach home prices in February 2022 were up 16.6% from the previous year, bringing the median price up to $799,000, almost precisely at the Los Angeles County average. [iii] They’re also selling faster than in the past, averaging only 29 days on the market as compared to last year’s 40.

By contrast, data shows both the Seal Beach and Signal Hills markets as only somewhat competitive compared to Long Beach. Seal Beach homes sold for a median price of $397,000 in February 2022, up 22.2% from the previous year. [iv] Similar to the Long Beach trend, time on the market was reduced, from an average of 57 days in 2021 to 49 days now. In Signal Hill, houses sold in an average of 21 days of February 2022, significantly reduced from an average of 36 days last year. [v] However, the median sale price declined 19.6% from last year, with the average at $575,000. This may reflect a change in the types of properties hitting the market, however, rather than a true decline in value—the average home there sells 2% above listing, with hot properties averaging 6% above list price.

Finding a Home in a Challenging Market

When you’re battling a competitive field to find a house, you need all your energy and focus to be on finding the right property and being ready to act when you do. Having experienced professionals behind you can ensure that navigating the complexities of a real estate purchase isn’t an additional worry. As an independently owned and operated company, Anchor Seaport Escrow can help. We’ve served the real estate community of Southern California for over 40 years, providing expert professional service no matter the ups and downs in the market. Buyers, sellers, and realtors can rely on our top-notch assistance with all their escrow-related questions and needs. To find out more about our services, contact us here.

[i] https://www.latimes.com/homeless-housing/story/2020-03-19/southern-california-home-prices-february

[ii] https://www.ocregister.com/2022/03/15/regions-home-prices-hit-another-record-high-in-february/

[iii] https://bit.ly/3qAPSRn

[iv] https://bit.ly/36MfmEf

[v] https://bit.ly/3IEGLWa

 

 

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Trends in SoCal Homebuying
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Trends in SoCal Homebuying
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Feeling a sense of urgency to get into the market now before interest rates continue to go up? Get the best escrow agent when you are thinking of buying your dream home.
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Anchor Seaport Escrow
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