Picture credit: Zillow
The housing market in Southern California is on the rise. It is estimated that over the course of one year from January 1st, 2020, through January 1st 2021, housing prices in the Orange County area have increased by 10.5%!
The reasons are varied. Due to the pandemic, people are spending more time at home and seeking bigger spaces. In terms of supply and demand, there are many more people wanting to buy a house than there are sellers who are willing to sell their house. In addition, borrowing costs for a home have decreased, with home mortgage rates at an all time low. This allows buyers to borrow more money at a lower cost.
Lisa Cox, a first-time home buyer in Orange County, California, recently closed on her home purchase after actively looking for six months. While searching for a new home, Cox’s budget for a new home kept increasing as the prices were rising month by month. With so little to choose from, she started talking to brokers about cold calling and sending out mailers to see if anyone would be willing to sell their house in the neighborhood she was looking.
“The housing market is so hot right now. There is very little inventory, and too much pent up demand. When I would see a house that I liked go on the market, it would get multiple bids and go under contract within one week,” she told News By Kid. “I was lucky to find a house especially since the housing market in Southern California is expected to remain strong this year.”
Gay Cororaton, director of housing and commercial research for the National Association of Realtors, said that “inventory is at its lowest point since 1982.” Because new housing construction has slowed down, that is contributing to the lack of supply. Some people remain cautious of signs that we are in a housing bubble, which is when home prices become overpriced and overvalued leading to the danger of popping and homebuyers suddenly losing a lot of value in their homes.