The Market & Industry: California Prices remain high while inventory tightens
Last week saw another decline in the number of listings added to the MLS in California, hinting at increasingly tight inventory in the weeks to come. And California REALTORS® are reporting listings are essentially flat, while closings and new listing appointments are falling.
Prices remain high; in Southern California, the median home price in August was up 12.1 percent from a year earlier. Even in the Bay Area, which is one of the nation’s weakest regions in recovering jobs lost during the coronavirus shutdowns, median prices were up 16 percent from the previous year. And nationwide, the median home price hit a record high.
Freddie Mac’s chief economist predicted mortgage rates, which have been steadily sliding all year, are beginning to flatten. But with rates still near record lows, buying power remains strong. And last week, the number of mortgages whose payment requirements have been suspended due to COVID dropped by 18 percent. For the first time since April, fewer than 3 million mortgages are in forbearance.
On Tuesday, C.A.R. released its 2021 housing forecast, predicting that low interest rates and high demand will bolster home sales in the coming year — but economic uncertainty due to the pandemic will limit sales growth.