Home prices in California continue to soar, even as the economy is battered by the pandemic.
The median price for a house in California reached a record-high last month, topping $700,000, according to the California Association of Realtors.
There are a few reasons prices keep going up. Mortgage rates have dipped below 3%, driving more buyers into the market. But inventory remains limited.
“Persistently low housing inventory will continue to push up home prices due to heavy buyer competition, which is starting to outweigh the benefits of record-low interest rates and hamper housing affordability,” said Jeanne Radsick, president of the California Association of Realtors, in a press release.
Ryan Lundquist is a real estate appraiser and market analyst in Sacramento. He says sellers are at an advantage in the current market.
“The winners are people who are downsizing, buying something smaller and pocketing the equity,” he said. “Or moving out of state into a lower-priced market.”
But he adds: “People who have lower-paying jobs … can’t get into the neighborhoods that they want.”
Lundquist said he’s loath to make predictions about the real estate market, but says a correction seems inevitable.
“Obviously this isn’t sustainable,” he said. “You can’t have this type of rapid growth, as we’ve seen lately, without at some point seeing the market correct.”
Only two counties in California — Mono and Glenn — saw median prices drop in August, according to the California Association of Realtors.
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