High prices to stay in California?
Ten years ago the Los Angeles real estate market had flatlined. Now, average home prices for Southern California are almost $300,000 more than the national average. Those believing the real estate bubble cannot last have long predicted a burst of the ever growing home price bubble, but are they right?
The overall outlook for long term mortgage rates is higher, but it will almost certainly stay below 8%. In fact, the general consensus seems to be around 7%. This should keep enough home buyers in the game, however, the rates won't be low enough to provide the kind of action that leads to double digit gains in home appreciation.
Still, that doesn't mean home prices are going to tank.
A new study, "titled "Homeownership in California," makes the case that the state's 57 percent homeownership rate -- the second lowest behind New York -- lags far behind the national average of nearly 70 percent because a patchwork of environmental policies and legal decisions has choked off new home building and thereby pushed home prices $300,000 above the national average." (more)
In reality, as the population in California booms in the next decades, California will have no choice but to grow up, rather than spreading suburban sprawl even further. This makes the value of land and homes a precious asset.
While there is a very good chance the the Southern California real estate market will pull back a little, don't expect it to pull back too much.
Need a California Mortgage Broker?
The overall outlook for long term mortgage rates is higher, but it will almost certainly stay below 8%. In fact, the general consensus seems to be around 7%. This should keep enough home buyers in the game, however, the rates won't be low enough to provide the kind of action that leads to double digit gains in home appreciation.
Still, that doesn't mean home prices are going to tank.
A new study, "titled "Homeownership in California," makes the case that the state's 57 percent homeownership rate -- the second lowest behind New York -- lags far behind the national average of nearly 70 percent because a patchwork of environmental policies and legal decisions has choked off new home building and thereby pushed home prices $300,000 above the national average." (more)
In reality, as the population in California booms in the next decades, California will have no choice but to grow up, rather than spreading suburban sprawl even further. This makes the value of land and homes a precious asset.
While there is a very good chance the the Southern California real estate market will pull back a little, don't expect it to pull back too much.
Need a California Mortgage Broker?
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