The State of Real Estate in California
While the housing market is healing nationwide, there is a particular growth spurt occurring in the state of California, specifically in Southern California.
In a recent report out by Forbes, “America’s Top 10 Fastest-Moving Housing Markets,” seven out of the ten cities listed were California cities while Western states in general dominated the list. The study, conducted in April of 2014, measured the number of houses that had been on the market for at least two months from the time span of February 14, 2014 to April 14, 2014, to help gauge the speed at which homes were selling. Oakland in particular made the list with 29 percent of homes for sale, which compares to the national average of 55 percent nationwide. So what does a speedy housing market signify and what’s the importance?
A speedy housing market is the sign of a low inventory of homes for sale, therefore pushing up the cost of homes as the market becomes a seller’s market and buyer’s bid higher and higher. This scenario also means cheaper, more affordable homes sell quicker and go for more than they may have sold for this time last year. While some fear a “housing bubble 2.0,” especially in more overpriced or overvalued parts of the country like Southern California, these fears are unwarranted because housing costs are up and inventory low as a result of a normalizing market, not over lending. And in general, prices are actually down from 2013 when it comes to general cost of homes in Southern California. Because price gains are not accelerating, but rather market inventory, another housing bubble particularly in this part of the country is highly unlikely.
Another cause and effect of a speedy real estate market in California is a rise in building and construction jobs. Increased jobs in construction have been helping to drive job growth in the area of Southern California in particular as the market “normalizes” and builders feel more confident building. Because it’s easier to judge a market that is somewhat normal and not flooded with foreclosed homes, there is in general more builder confidence and this is a good thing for a recovering housing market that has a past of being overvalued and overpriced. This construction boom isn’t just occurring in the housing market either, but also in apartments and condo style living. One such development making a statement are the modern apartment-style homes by Apex, offering resort-style amenities like a rooftop pool and spa and private cabana. While the rental market did not go through such distress as the housing market, this is good news and a welcome sign to the area. As builders gain confidence, from high rise resort-style apartment homes to unique gated communities springing up, we can hopefully expect a continued upturn in housing markets nationwide, hoping that California is an example of what’s to come when it comes to a normalizing market and increased jobs in construction.
Read more: DigitalJournal.com