July 2021 SoCal home price update

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Our Team Forss Estimate shows you what your home is worth, based on how the local market is changing and how your home compares to recently sold homes nearby. Contributed Photo

The real estate market remains hot for sellers as we approach the midpoint of summer. Prices are rising, and home seller expectations are sky-high. 24% of home sellers expect to get more than their asking price when all is said and done.

Additionally, 53% of sellers expect that they’ll at least get their asking price once they put a home on the market, according to a recent survey by Realtor.com. Why do prices continue to rise, and how much longer will this trend last? These three key points tell the story:

1. Pending home sales have surged. According to a report from the National Association of Realtors, pending home sales rose by 8% from April to May. Economists had previously projected a 1% decrease.

The chief economist at the NAR, Lawrence Yun, had this to say: “May’s strong increase in transactions—following April’s decline, as well as a sudden erosion in home affordability—was indeed a surprise. The housing market is attracting buyers due to the decline in mortgage rates, which fell below 3%, and from an uptick in listings.” The uptick in pending sales could be sustained by the strong stock market and rising home prices.

Yun also predicted that more homes will be listed in the second half of 2021, which would help quell the rapid surge in home prices. Even with an uptick in inventory, the market may continue at its breakneck pace because…

2. More homes were listed in June, but prices still hit all-time highs. We saw a needed influx of inventory over the past month. New listings increased by 10.9% in June, and they’re up by 5.5% for the year. Even though this jump is significant, the overall number of homes for sale is still down 43.1% year over year.

Since we have far fewer homes for sale compared to last year, prices have seen a boost. The median list price is up 12.7% over the past year and now sits at $385,000. Realtor.com Senior Economist George Ratiu calls it a “shift away from an overheated market to a new normal.”

“More homeowners are deciding to put their homes on the market, encouraged by vaccines, a stronger economy, and low mortgage rates,” says Ratiu. “What this means is buyers will have more choices at more affordable prices.” These numbers are all encouraging for homeowners, but some are still hesitant to enter the market since…

3. Sellers need a moving plan from the start. While a home is going to sell pretty quickly in today’s market, you’re going to need a plan for buying. Stephanie Ruhle, NBC News senior business correspondent, said “It is very possible that your home will sell quickly, and you don’t want to be crashing in a hotel while you compete for a new place.”

Some sellers are negotiating rent-back agreements with buyers that allow them extra time for their home search. Others are finding temporary housing or moving in with relatives during the buying process. Every situation is different, but just know that you do have options to help lessen your success as a seller.

What does all of this mean for you? As long as demand remains high and inventory stays relatively low, homeowners are in a great position to sell. Quick sales with multiple offers continue to be more of the norm than the exception.

While mortgage rates remain low for now, there’s a good chance that we’ll see an uptick in the coming months. Leonard Kiefer, deputy chief economist for Freddie Mac, expects these historically low rates to stay at least through the summer.

If you’ve even been entertaining the idea of selling your home this year, I invite you to instantly calculate your home’s value in today’s market based on recent SoCal sales:

Enter your address at the link below to find out what your home is currently worth https://www.teamforss.com/home-valuation/ If you have any questions about potentially selling your home, feel free to give me a call at 951-760-6027. I’m talking to both buyers and sellers around SoCal every day, and I can help you make the right decision for whatever you decide to do.

Team Forrs Realty Group • Contributed

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