March results are in.
Sales remain light.
Inventory remains low.
Interest rates remain above 6%.
March is the sixth month in row with fewer than 100 sales. Less than 100 sales in any given month is rare. Looking back 10 years, it's very rare and seldom happens twice in the same year. The lack of inventory is hurting the amount of sales, but it's also keeping prices elevated.
Periodically someone will ask, is there going to be a price correction this time. Maybe not, at least not like last time. We've gotten to these price points in an entirely different manner. We don't have inventory, but we have buyers.
In 2008 when the housing bubble burst and prices began to fall, there was a lot of inventory for sale and no demand. Inventory kept growing, and prices kept falling.
So far for 2023 the Median Sales Price has drifted down a little, but we have not had a noticeable drop in price. Homes priced "properly" are selling quickly, often times with multiple offers. "Overpriced" homes are taking longer and may or may not experience multiple price adjustments before selling, but overpriced isn't necessarily a measurable constant.
In 2006, 21 percent of California buyers provided no down payment. Today, it is less than 3 percent.
The percentage of home buyers who purchased with a second mortgage was 43 percent in 2006. Today it is less than 2 percent.
Adjustable rate mortgages accounted for 33 percent of all purchases in 2006. Today they account for 2 percent.
There are nearly twice as many all-cash buyers today than in 2006.
Lending criteria are much stricter today and have not loosened up much since the abuses during the bubble years. A buyer needs to have a down payment, verifiable income, ample reserves, and a minimum credit score that is higher today than in 2006.
- pulled from the California Economic Forecast 04.11.2023
