The volume of sales transactions are down compared to the same month last year. However, the Californian housing market still holds a steady over valuation above consumer expectations
Los Angeles , United States - January 12, 2015 /MarketersMedia/ —
November was another period where the Southern California housing market continued to showcase the stalemate between buyers and sellers that persisted throughout the second half of 2014. The volume of sales transactions was down 9.5% compared to the same month one year ago; though the year did end on a higher note with a slight pickup in December.
Six years ago, the California housing market was one of the hardest hit areas of the U.S. after the housing bubble burst in the mid-2000s. The ripple effects of the housing bubble can still be felt today and in coastal markets, where pricing is reaching its prior peak (and in some cases exceeding it) uncertainty in buyers is a theme that is front and center.
Typical home buyers in Southern California do not pay attention to the daily gyrations in the market. In short time intervals there is more noise than signal, and paying attention to interest rate movements tend to be a better method of gauging pricing movement, rather than relying on past sales data.
A founder from Blake Buys Homes (http://www.blakebuyshomes.com/about/), a volume home buying company that buys houses in Southern California directly from owners, has garnered continued success by closely gauging market conditions explained, “We track interest rates, it’s that simple. Sales comparables are always a critical component of where the market has been but the effects of interest rate swings can be dramatic and the ensuing results will not be reflected in past data. If you want to know where the market is headed, follow the cost of borrowing money.”
Another headwind for home values in Southern California is the continued rise in the cost of living. Continue inflationary pressures on everything from home goods to food and gas, puts additional pressure on individuals with flat or declining incomes. Rising utility costs, felt by renters and homeowners, continue to reduce disposable incomes and deter renters from making the leap towards homeownership with the uncertainty of how high living costs will be in the near future. Staying put or downsizing seems to make more sense than ever for most Southern California residents.
While housing costs are higher than most other parts of the country, it’s not all doom and gloom for SoCal (http://www.prreach.com/blake-buys-homes-orange-county-housing-market-in-decline/). On average, the Californian market still holds a steady over valuation of around 11% above consumer expectations. While it is far off from the 66% above that LA held back in 2006, pre-crash, it’s a considerable, healthy indicator of the average consumers opinion of where housing should be. If and when the job market takes off and wage growth accelerates, this mentality will translate into positive housing trends.
Industry professionals have expressed hopes and expectations for a solid, steady market in 2015, but Federal Reserve policy and interest rate controls will likely dictate market conditions.
For more information about us, please visit http://www.blakebuyshomes.com/how-it-works/
Contact Info:
Name: Tom Blake
Organization: Blake Buys Homes
Phone: (949) 354-3215
Video URL: http://vimeo.com/110307715
Source: http://marketersmedia.com/southern-california-housing-market-stagnation-continues/71877
Release ID: 71877
