The California housing market is changing, and if you're a buyer, there’s good news. Right now, conditions are becoming more favorable for those looking to purchase a home. Let’s dive into why now might be the best time to start your home search.
More Homes to Choose From
In recent weeks, we've seen a slight rise in the number of homes available for sale in California. This means there are more options for buyers like you. With more inventory on the market, buyers have the opportunity to find the perfect home that fits their needs. In comparison to previous months, you’ll notice that you have more choices than you’ve had in quite a while.
The slowing demand for homes is also working in your favor. Fewer buyers are competing for the same properties, so you’re less likely to encounter bidding wars that drive prices higher. It’s a refreshing change for buyers, especially those who have been frustrated by limited inventory in the past.
Interest Rates Are Improving
Interest rates are another reason to get excited about the California housing market. While interest rates peaked at around 8% in late 2023, they have been steadily improving. Right now, interest rates are hovering around 6%, and they could go even lower as we head into 2025. Lower interest rates can make a big difference in your monthly mortgage payment and overall affordability.
Though rates are improving, it's important to remember that the best deals happen when rates are low but demand is still manageable. As rates continue to drop, more buyers are likely to re-enter the market. This means competition could pick up again in the future. Acting now could save you both time and money in the long run.
A Slower Market Benefits Buyers
We are officially entering what’s known as the "Autumn Market" in California real estate. This is the time of year when the market naturally slows down. Summer is behind us, kids are back in school, and fewer people are actively looking for homes. This shift leads to less competition, giving you more leverage as a buyer.
The slow season in real estate is typically a great time to get serious about purchasing a home. With fewer buyers out there, sellers are often more willing to negotiate. You might be able to score a better price, ask for repairs, or negotiate other terms to your advantage.
Why Foreclosure Fears Are Overblown
You’ve probably seen some alarming headlines about a potential foreclosure crisis, but let's set the record straight. California’s foreclosure rates are actually quite low right now. In fact, the national delinquency rate is far below where it was during the Great Recession.
Yes, there have been minor increases in foreclosure rates recently, but these numbers are coming off historically low levels. For example, if a neighborhood had one foreclosure and now has two, that’s technically a 100% increase—but it’s not a sign of a crisis. The reality is that California's housing market is much stronger than it was during past economic downturns.
Homeowners Are in a Strong Position
One of the key reasons the California market is stable is because today’s homeowners are in a much better financial position. Most people who own homes now have strong credit, stable jobs, and a lot of equity in their properties. This wasn’t the case during the housing crash of 2008.
Many California homeowners are “equity-rich,” meaning they owe far less on their mortgages than their homes are worth. This financial buffer protects them from foreclosure and allows them to weather market changes without being forced to sell.
Additionally, lending standards have tightened since the last crash, meaning buyers now have to meet stricter requirements to qualify for mortgages. This has led to a healthier, more resilient housing market overall.
Looking Ahead: What to Expect in 2025
While the current market is favorable for buyers, we expect even more improvement in 2025. Interest rates are predicted to continue dropping, which will make homes more affordable. However, as rates fall, more buyers will jump back into the market, potentially leading to increased competition.
If you’ve been thinking about buying a home in California, now might be the perfect window of opportunity. The combination of rising inventory, improving interest rates, and a slower market all work in your favor. By acting now, you can avoid the rush of buyers who are likely to return when interest rates drop even further.
The Bottom Line
Buying a home in California is a big decision, but the current market conditions are giving buyers the upper hand. More homes are available, interest rates are dropping, and competition is low. If you’re ready to take the next step in your home search, now could be your time to make a move.
For more information on navigating the California housing market or to discuss your options, feel free to reach out. With the right strategy and timing, you can secure your dream home before the market heats up again.