Real Estate Market Trend in California
Traditionally, the housing trends of California have generally been the precursors for the remainder of the nation. Which is why top people of the housing market continue to keep a close observation on the Golden State's housing industry's situations.
And no matter if you are a 1st time home buyer, discussing the possibility of constructing your dream house in Napa, or a real estate investor wanting to sell condominium units in San Diego, you definitely want to know: When is it the the best possible time to acquire or sell off real estate?
Buying a home is a significant investment decision. With careful preparation, this important investment will appreciate in value with each year.
But how do you get the big picture? Thankfully, real estate investment trends are predictable because these investments develop over a long period.
The primary factor you need to do is how to understand and track real estate trend in your area.
As soon as you have recognized the following critical indicators you will have a greater grasp of the general trends in California's real estate market.
The five KEY Indications to watch
When interest rates go up, potential buyers shy away. On the other hand, low interest rates entice more buyers.
This year (2012), interest rates in California and elsewhere are on an low side. For example, thirty years fixed mortgage rates, which had averaged 5.71 percent in 2005, has dropped to 3.5 percent levels in January 2012.
The greater the number of constructing home permits granted, the better the need for houses.
This essential sign refers to the overall number of properties sold. In the law of supply and demand, when there are few prospective buyers, real estate prices fall.
An additional factor to think about is the growing supply of available homes in specific counties in California, which is shifting the market dynamics. What was once a sellers market has gradually turned into a buyers market.
This pertains to the inability of property owners to pay their monthly home loan. One draw back to this is that a lot of Californian home owners are selecting to have a bad credit report, rather than to continue to keep paying mortgages for a house whose worth has been inflated by as much as fifty percent than the market value.
Figures provided by some expert housing company, suggest that foreclosure activities in California will go up ten percent after the $25 billion mortgage settlement is over with. This will be a significant increase over the last few quarters.
When foreclosure sales are on an rise, consumer spending down and consumer personal debt amounts have increased. In the housing market, this meant that a lot of financially strapped property owners are either short selling their homes at lower prices or simply foreclosing. Some other factors are the rising costs of gasoline inflation, federal budget deficit, and interest rates.
These crucial indicators validates that despite the fact that home sales levels in California are falling, the demand from buyers for properties continues to be strong and continuous. Always do your homework prior to undertaking a purchase of real estate in California.
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