California has been known for an expensive housing market for generations; that part is certainly not new. If you feel like home prices are even higher than usual, you’re not alone. You’re not wrong either. Many real estate experts say we’re in a housing bubble right now. What does that mean? And perhaps more importantly, will it crash soon?
What’s Going on?
According to Zillow, at the state level, California’s housing market remains the most valuable in the country. It features a total value of $9.24 trillion in December 2021, accounting for more than a fifth (21.3 percent) of the national total.
The tell-tale signs of a housing bubble are all happening right now. This includes low inventory, quick sales, multiple offers on most properties, houses selling for well over the asking price, and people waving inspections and contingencies. Also factoring in is the fact that home renovations are taking substantially longer than predicted due to low supply on flooring, cabinets, and other supplies needed. When people can’t renovate to make their home great, they move instead.
Of course, there’s also the COVID factor as well. No one was buying houses at all for a majority of 2020. In late 2020 and 2021, the housing market sizzled across the nation and here in California, with annual existing-home sales hitting their highest mark since 2006, according to the National Association of Realtors (NAR). California home prices continued to rise last year, regaining speed following an eight-month lull.
Will the Housing Bubble Burst?
The California housing market sizzled last year to break all records. It was a hot seller’s real estate market, to say the very least! That is what is happening now, but what happens next? Will the marketing crash?
The supply-demand imbalance continues to heat the market, with many buyers offering sales bids that are higher than the asking price. If you’re a prospective first-time homebuyer hoping that home prices will decline in 2022, most experts agree you shouldn’t count on it. In fact, some experts are actually predicting healthy price gains in 2022, between 4% to 6%.
Whether you’re buying or selling a home during the housing bubble, this hot market requires a dedicated real estate agent by your side. Those buying a home need a fierce agent who can get them their dream home, even with others moving quickly to claim it for themself. Sellers need just as much help right now. You’ll no doubt field multiple offers, all with different contingencies and closing details. You don’t want to miss out on the best option for you to be able to move in. This is something the right real estate professional can help you decide upon. You can trust the Frazzano Tse Team with this!