California Real Estate Market And Trends
California is one of the most beautiful states in America. There are pristine beaches, historical landmarks and a wide variety of cultures. California has been one of the most desired locations in the United States to own real estate for many years. It has been an ideal place for homeowners, buyers and real estate investors. Presently, the California real estate market has improved significantly within the last year compared to many other state’s real estate conditions.
The median home price in California for homes sold in June 2009 was approximately 246,000. This was a 7.0 percent increase of the median price in May 2009. The average mortgage payments in June 2009 are also at a much better price than they were back in June of 2008. California's real estate showed a dramatic increase of 25.5 percent in new, resale homes and condos in the month of June 2009. This increase was compared to the sell of California homes in June of 2008. Although there has been an increase in homes sold in June 2009, unfortunately 45.9 percent of the resale homes were foreclosures.
One of the benefits of buying a home that has been a foreclosure is the discounted purchase price. Many potential home buyers are actively seeking real estate that has been in a foreclosure. These types of homes and condos can be purchased by the home buyers for a significant reduction of the appraisal of the home. The banks and mortgage companies will accept a low offer because they are eager to quickly get the property out of their hands and see a cash return as soon as possible. Foreclosures are a great option for buyers that are seeking a deal because these properties are priced to sell.
It may seem that it is more of a buyer's market right now, but in truth, a seller has many advantages in the real estate market also. The market has increased significantly in homes selling in the last year. This gives the sellers an optimistic approach when the time comes that they are ready to sell. A year ago, it was a much more difficult task cashing out on your home's appreciated value. Since the market in California real estate has been increasing each month, sellers are now able to see that the equity in the home is paying off for them. In the previous year, sellers struggled when they were trying to sell their homes. Many sellers had quite a bit of equity invested into their properties, but were unable to see a return in cash when they sold their homes. The economy was in such a poor state that sellers were relieved to be able to break even. Now, the real estate market is in a much better condition and allows sellers to have a better stance in the real estate business.
Currently, California mortgage interest rates are at a record low to entice potential buyers. The rates are significantly lower than in previous years for real estate. Not only can buyers see great rates on adjustable mortgages, but fixed rates are at an excellent amount as well. Right now, with the interest rates at a low and homes selling for reasonable cost, it is a perfect market for buyers. There are also many mortgage companies and lenders that have competitive interest rates, as well as very little to no closing costs, low fees and other incentives to lure home buyers and sellers. Even though the California real estate market is steadily improving, these lenders are still competing to offer the best deals for sellers and buyers so they can get their business.
There are several important factors that need to be closely monitored in California real estate trends. Buyers and sellers should comprehend each one in order to have a complete understanding of the market. This is very beneficial for both parties in their search of buying or selling a home so they will be able to make wise and educated decisions.
1. Current Interest rates - The lower the interest rates, the more buyers are inclined to purchase a home. When interest rates start to climb, buyers will be leery of making a large purchase such as real estate property.
2. Number of building permits issued - Obviously the higher number of building permits that are issued reflects the number of constructions of new homes.
3. Defaults in loans - This occurs when homeowners stop making their monthly mortgage payments.
4. Sales of foreclosures - Anytime that foreclosure sales are on the uprise, this means that consumer spending is low and the debt has increased. In real estate, this often means homeowners that are in a financial bind will sell their homes at a much lower price.
5. Number of homes sold - Real estate prices tend to fall when the number of buyers is low.
There are also other contributing factors in real estate trends which include federal budget shortage, inflation and the general economy situation. By following these real estate trends, buyers and sellers will have complete knowledge and be well informed of the real estate market condition.