The Los Angeles and Orange County real estate markets turned up the heat in March, and the streak continued through April. Both home prices and sales saw serious increases as spring weather returned to Southern California.
Orange County resale condo prices hit a median value of $475,000 in March, which is $5,000 more than the previous peak during the housing boom. In fact, real estate agents from across the state say this is one of the best times they’ve ever seen for sellers.
“I’ve been selling real estate for 25 years and this is the strongest seller’s market I have ever seen in my entire real estate career,” said David Fogg, a real estate agent with Keller Williams in Burbank, California, to CNBC.
While it’s the perfect climate for sellers, buyers are struggling. Approximately 83% of Americans believe that having a lawn is important, but finding that dream home with a green lawn and white picket fence isn’t the issue — securing its purchase is. Bidding wars are now normal for many home buyers seeking out their dream house.
It’s especially common for first-time buyers, who comprise much of the new housing demand. Considering that fully 92% of people now use the Internet during their home search, many of these potential buyers are coming across the same listings and competing for them.
The fierce competition is proving difficult for anyone looking to buy in California’s seller’s market. Despite that, houses are still selling almost as fast as owners put them on the market.
“Our sellers are optimistically pricing their homes in today’s market, and I have to say in most cases we’re getting the home sold anyway,” Fogg said.
Homes under $750,000 still see the highest demand, and they’re also the homes with the most buyer competition. According to Steve Thomas of Reports On Housing, lower-priced for-sale inventory in Orange County is still minimal.
“When you hear about multiple offers within days and lines of people touring the open house, chances are it is a home in the lower end of the market…yet there are not enough on the market today,” he said.
It’s unclear how long this housing boom will last in California, but the demand is undeniable. High housing demand has priced many buyers out of the housing market altogether and pushed them towards condos instead.
Tom Smith, one such buyer, said that the houses he could afford were either too old, too small, or needed too much work. While a new metal roof might last 50 years or more, many older homes come with a long and expensive to-do list. And for the growing number of young or first-time homeowners in the market, a fixer-upper might not always be feasible.
But even condo prices have skyrocketed, to the point where Smith and others like him have agreed to pay well above asking price.
“I’m thinking of stepping back to see what the market does,” Smith said. “I’m hoping the market comes down.”
Smith and many others are in the same boat. It’s unclear what the California housing market has in store, but many are hoping it cools down as summer approaches.
