What’s in store for the California’s housing market in 2013?

  
The recent positive headlines on the real
estate market show that housing has finally
turned the corner. Nationally home sales are
up 11.0 percent over that of last year, even
the sales of new homes are up 25 percent
from the year before, and the median price is
up 11.7 percent. The median price of existing
homes nationally is also up 11.3 percent from
a year ago. New residential construction is
soaring; since September 2011, single-family
housing starts have increased 43 percent,
and apartment construction has increased 19
percent.
In California housing fundamentals seem
strong as well. Existing home sales are up 5.9
percent for the year, while prices posted a
19.5 percent jump. Non-distressed sales
continue trending higher, currently at 63
percent of all sales, as compared to 30
percent in early 2009. Distressed sales, on
the other hand, dropped from 60 percent in
2009 to 37 percent. Increasing home prices
have certainly created a sense of urgency
among buyers causing many listings to have
multiple offers and to close above the listing
prices. Significantly low inventory constrained
sales for most of 2012. In September, the
unsold inventory index reached 3.2 months,
less than half of the historical average of 7
months. The REO inventory is even lower, at
1.8 months, and less than a month in some
areas, like the Orange County. The result of
the low inventory is reflected in the soaring
home prices, particularly in the Bay area,
where employment growth has fared better
than the rest of the state. Read More