Key highlights from this report:
- New reports show a lot of people still want to buy a home in California.
- The state’s gradual reopening is giving new life to a sluggish housing market.
- Some analysts expect an increase in home-buying activity during summer 2020.
In normal times, mid to late spring is when the housing market starts to heat up. Winter is behind us. The weather is warming. And home buyers are out in full force, eager to make a purchase.
Of course, these aren’t normal times. By mid-April, the coronavirus (COVID-19) pandemic had slowed the California housing market to a crawl. As a result, the spring home-buying “season” has paled in comparison to years past.
But it’s not a total bust. Far from it. As we reported at the end of April, mortgage loan applications among home buyers in California have risen in recent weeks. Now, a new report shows that a lot of folks are still eager to buy a home.
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Will summer 2020 be the beginning of a gradual rebound for California’s housing market? Only time will tell. But some signs are pointing in that direction.
Realtor.com: Home Buyers Nationwide Are ‘Gearing Up’
On May 18, Realtor.com® published a report that showed a lot of home buyers in California and nationwide could be gearing up to make a purchase in the near future.
According to the company’s press release: “increased activity on realtor.com® suggests that home shoppers are gearing up for a later than usual homebuying season.”
The company has seen a marked increase in the number of property views, saves and shares in recent weeks. This shows that there is still a lot of demand among home buyers, even as the public-health crisis drags on.
It seems that a lot of home buyers in California and across the nation are signing up at Realtor.com to monitor price reductions, new listings, etc. In a recent survey, more than 70% of the site’s users said they registered in order to “track price reductions and make a shortlist of homes” for house-hunting purposes.
Other trends that have occurred on realtor.com since March 16, 2020:
- Listing views for single family homes and condos are up 30 percent;
- Saved homes are up 76 percent;
- Shared homes are up 95 percent; and
- Time spent per unique user is up 14 percent.
According to Danielle Hale, chief economist for Realtor.com:
“Data suggests that home shoppers who had paused their search are now picking it back up, and the spring homebuying season won’t be lost, but merely pushed into the summer months.”
This is one of several indicators that suggest we could see more home buyers entering the California housing market in summer 2020. No one can predict the future with complete accuracy, especially in uncertain times like these. But is seems likely that the California real estate market will pick up as we move into the summer months.
This goes hand-in-hand with the state’s economic reopening. Most counties in California are now entering some stage of a broader reopening plan. State officials recently issued revised guidelines for the real estate industry, to keep it operating while safeguarding public heath.
MBA: ‘Pent-Up Demand’ Is Being Released
Another recent industry report showed that “pent-up demand” among home buyers is now being released. This is another positive trend that bodes well for the California real estate market in summer 2020.
The Mortgage Bankers Association (MBA) reported that home purchase loan applications rose by 11% during the week ending on May 8, 2020 (compared to the previous week).
As with Realtor.com, the MBA’s analysts are also seeing signs that home buyers are eager to get back into the market. On May 14, MBA’s economic forecasting chief Joel Kan wrote:
“There’s evidence now that unrealized, pent-up [housing] demand is being released as states start to reopen. We expect that heading into the summer, more prospective home buyers will gradually return to the market.”
California Housing Market Trends for Summer 2020
If more and more home buyers do enter the California housing market during the summer of 2020, what will they find? What will the real estate market be like during the summer months?
Here are some key trends to be aware of:
- Individual visits — New protocols for home showings limit the number of people who can be present in the property at the same time. So the traditional “open house” is out, at least for now.
- Less competition — Job losses and a general reluctance to be “out and about” could keep some would-be buyers on the sidelines this summer. So those home buyers who do enter the California housing market this summer could encounter less competition, compared to previous years.
- Fewer properties — According to a May 18 press release from the California Association of REALTORS, housing market inventory statewide has been on the decline. As the industry group wrote: “Total active listings continued to decline on a year-over-year basis for the 10th consecutive month, and the 25 percent decrease in listings was consistent with what has been observed before the shutdown.”
Talk to Us About Your Mortgage Needs
Do you plan to buy a home in California during the summer of 2020? Do you need a mortgage loan to help make that happen? We’re here for you.
Bridgepoint Funding has been meeting the mortgage needs of California home buyers for going on 20 years. As a broker-based business, we can give you access to a broad range of flexible mortgage programs.
Please contact us with any financing-related questions you have!