Will there be a 2023 Spring Homebuying Season?
Spring is nearly upon us, so what does that mean for Spring’s usual homebuying season? According to the California Association of Realtors (C.A.R.), California’s housing market shows signs of improvement and a better homebuying season in 2023 than in 2022. The improvements have been gradual but show a steady increase in closed escrow sales from December 2022 through January 2023. C.A.R. attributes this 0.4% increase to slightly lower interest rates and a little more home affordability. The California market is showing signs that these gradual improvements will continue to persevere into the months ahead and into Spring 2023’s homebuying season.
Home prices are falling… a bit.
Affordability in the California housing market has long been an issue and it will continue to persist with job layoffs and the broader economic environment. However, these factors are likely contributing to softer home prices providing more affordability to some would-be homebuyers. According to C.A.R., the median home prices in California dropped to $751,330 in January 2023 which is a 1.9% drop from January 2022. The data suggests that while minimal, the market is moving in the right direction with a little more projected homebuying activity this Spring.
Some California markets’ home prices are dropping at a faster rate.
While California overall is experiencing a slight fall in home prices, certain cities are falling much faster.
Some of California’s most popular cities have experienced much steeper declines in the last few months. According to Zillow, San Francisco, San Jose, Stockton, Los Angeles, San Diego, Oxnard, and Sacramento have all seen median sale prices drop by at least 5% or more within a three-month period from September 2022. Riverside is not too far behind the rest of the metro areas with a -4.65% 3-month change in price.
These stats are derived from GoBankingRates which used Zillow’s September 2022 median sale price data to determine where home sale prices in California are falling the most.
What does this mean for real estate investment properties in 2023?
A healthy housing market is always ideal for flipping homes. Moving the needle even just a little bit closer to the depiction of health is progress for 2023 and can provide potential deals. Higher mortgage rates from the previous frenzy of historically low rates have dramatically slowed the competition for homes. This gives a real estate investor more opportunities to take advantage of potential deals, especially with housing prices taking a dip in these metro markets with significant declines. Mortgage rates are still volatile, but demand is still strong, and they have shown a decline in recent months. For more on buy-and-hold strategies or flipping, read more here. Otherwise, it may be a great time to take advantage of Spring’s homebuying season whether you are buying or selling an investment property. Give us a call at (949) 535-1530 to discuss your options for financing or apply now!