California, Southern, Northern, Central, Coastal, When will my home value return?

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California’s Real Estate Market:
When Will My Home Value Return?

It’s no secret that California experienced one of the worst drops in the housing market over the past two years. As the numbers are released for 2013, many experts, including Standard & Poor’s Ratings, agree that California’s housing market has finally bottomed out. However, as a homeowner, you may still be wondering when the value of your home will finally begin to show signs of recovery.

According to the Fiserv Case-Shiller analysis for Moody’s, your home will not likely return to its boom-era values until at least 2018 or later. If your home is located in the Southern California coastal regions, expect prices to rebound to 2007 or 2008 levels between 2018 and 2025. If you own a home in central California or inland cities, then it may take until after 2025 for the prices to rise again to the boom levels.

However, there is good news for you. Much of the improvement in the overall housing market in California has been seen in the prices of homes that were bought between 2003 and 2008 – undoubtedly California’s biggest real estate bubble in history. The gains in values of these homes have allowed the market to slowly recover.

Median Home Prices Continue to Climb

Amidst a few home value gains in California comes the grim news that April home sales were down over eight percent from the year before. Median prices for existing homes, however, rose nearly 21 percent. The statewide median price for an existing single-family home in California increased to $306,230. This is certainly good news you as you look towards a gradual recovery in your home prices.

The state tax credit that went into effect in May, however, could have been to blame for the decrease in home sales, as many buyers simply put off closing until May 1 to take advantage of both state and federal tax credits. As these tax incentives make their way through the system, many real estate experts expect sales to stay strong throughout the summer.

In addition, mortgage rates continue to remain incredibly low, thereby allowing many buyers to take advantage of both low interest rates and affordable home prices. A 30-year fixed mortgage was 5.10 percent as of May 1, according to Freddie Mac.

Positive Signs of Recovery

Other positive signs of recovery in California can be seen when examining the number of days homes sit on the market. The median number of days it took to sell a single-family home in California is currently 39.4 days, a positive turnaround from 48.1 days during the same time last year.

The highest median home prices in California, as of April, were: Manhattan Beach, Saratoga, Los Altos, Mill Valley, Laguna Beach, Cupertino, Newport Beach, Los Gatos, Calabasas, and Santa Monica.

The demand for distressed properties continues to drive the market and inventory remains consistent in most markets because of it. Homes that are priced below $300,000 are driving sales, as there is currently just a 3.3-month supply for these homes compared to an historical average of seven months.

In conclusion, California’s real estate prices have appeared to reach the bottom, and many experts do not expect a further decline in prices. However, many analysts do not expect your California home to return to its 2007 and 2008 prices until well after 2018 or even 2025.


California Largest Cities by Order of Size

1. Los Angeles
2.San Diego
3. San Jose
4. San Francisco
5. Long Beach
6. Sacramento
8. Oakland
9. Santa Ana
10. Anaheim

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