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The California Dream In Real Estate
By Mr. Crowd 16 Jul 201723:18
Nice beaches, great weather year round... Many people dream of living in California. But the increasing real estate prices may not meet up to their realities. According to Zillow, the median home value in California is $500,200, up 7.5% over the past year. California’s housing market rebounded in May as existing home sales and median home price recorded strong gains on both a monthly and annual basis, a trend in every major region of the state, the CALIFORNIA ASSOCIATION OF REALTORS.
Mortgage Rates Stay Low
While mortgage rates were near all-time lows, buyers battled each other for the purchases of limited selections on the market. Newer homes, lower rates, and higher incomes drive interested homeowners to make a splash while they see good timing or they are in the position to obtain such real estate property.
With low inventory, not just in California, but across the nation home sale prices rise due to the demand of more interested buyers. Many homes will sell for more than they may be worth because there is simply more people bidding on the same home.
Although interest rates have risen since the November election, the Federal Reserve could scale back its expected pace of interest rate hikes, if inflation continues to be soft, Chair Janet Yellen told Congress recently. Real estate price increases have far outpaced income gains in recent years. If interest rates stays low, it is possible home prices will continue to grow as they have been in the past few years.
The median home value in California is $500,200. California home values have gone up 7.5% over the past year and Zillow predicts they will rise 2.6% within the next year. The median list price per square foot in California is $297. The median price of homes currently listed in California is $499,000. The median rent price in California is $2,650.
California price figures are substantially higher than the United States averages. The median home value in the United States is $199,200. United States home values have gone up 7.4% over the past year and Zillow predicts they will rise 3.2% within the next year. The median list price per square foot in the United States is $139. The median price of homes currently listed in the United States is $255,990. The median rent price in the United States is $1,600.
Declining Mortgage Delinquencies
According to an analysis by data company Corelogic, 4.8 percent of home mortgages were in some stage of delinquency, down from 5.3 percent a year earlier and the lowest for any April month since 2007, when it was 4.5 percent. The measure includes all home loans 30 days or more past due, including those in foreclosure. The foreclosure inventory rate, meaning the share of mortgages in some stage of the foreclosure process, fell to 0.7 percent, down from 1 percent a year earlier and the lowest level since July 2007, when it was 0.6 percent.
“Most major indicators of mortgage performance improved in April, showing that the market continues to benefit from improved economic growth and home price increases,“ said Dr. Frank Nothaft, chief economist for CoreLogic.
In California, foreclosures will be a factor impacting home values in the next several years. In California 1.1 homes are foreclosed (per 10,000). This is lower than the national value of 1.6.
In the United States, China is now a major source of foreign investment with capital flowing into virtually every industry and market, in particular, the real estate market. According to an Asia Society Special Report, Chinese buyers spent at least $93 billion on homes, including condominiums, for occupancy and investment between 2010 and 2015, representing an annual rate of 20%. Chinese investors also acquired at least $17.1 billion of existing office towers, hotels, and other commercial buildings, representing an annual growth rate of 70%.
California is a location in which there is great continued interest from Chinese buyers. California has a large Chinese population in cities such as San Francisco and Los Angeles. California’s first-class education and the world’s leading universities such as Caltech and Stanford in the region also attract Chinese families.
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