By Staci Caplan
Santa Barbara Association of REALTORS®
A survey of California REALTORS® taken over the weekend and data on the pandemic itself showed positive signs for recovery where the housing market remains a relatively bright spot. However, there are several factors which show that the effects of the recession continue to weigh heavily on the pace of the recovery, even in a brisk housing market.
Buyer demand, particularly here in California, remains very vigorous. Mortgage applications nationwide are more than 20% above 2019 levels. Requests for showings in California are more than 90% higher than they were at this time last year, despite COVID constraints. Buyers have adapted to the virtual process and are more comfortable moving forward to purchase even from afar.
And yet, even as California’s housing market and economy see signs of life, the challenges we face remain very much ongoing. Recently released data on the second quarter shows that the economy contracted by 32.9% — the largest quarterly decline in recorded history. In contrast, the U.S. economy shrank by less than 18% during the Great Recession of 2009.
Housing inventory will remain an obstacle for California’s recovery—especially amidst such robust demand. New listings were down 6.8% last week and were essentially flat for the preceding 3 weeks. And, with the number of COVID-related deaths in California still rising and the real estate market facing ongoing restrictions that make it challenging to list and sell homes, inventory is likely to remain depressed for the near term.
Thus, even as California continues to make progress, it is critical that we temper our optimism with realism. Many Californians want to buy: their home is more important now than ever before given that people are spending so much time there; they have more flexibility with their housing decision because many can now work from home; rates are low and have provided a significant boost to affordability.
The data suggests that inventory is near record lows, homes are selling very quickly, and there is minimal evidence of discounting on the typical home. Higher demand on top of existing low housing inventory is likely to result in a recovery that is much slower than we would have hoped for and one in which not as many buyers will be able to get into home ownership as desired. If you are thinking of selling, now is a good time to take action with the assistance of your REALTOR®, who can walk you through the safety guidelines and the latest virtual technologies for marketing and completing a sale.
Call your REALTOR® today if you are thinking of selling to find out your home value in today’s market. Contact the Santa Barbara Association of REALTORS® at sbaor.com for the virtual open house directory.
Staci Caplan is a California Real Estate Broker and the owner of Pacific Crest Realty. She was born and raised in Santa Barbara and her passion for this special region translates into successful real estate transactions and thrilled clients. At our local Santa Barbara Associations of REALTORS ® , Staci has served on the Board of Directors, the Government Relations Committee, the Budget and Finance Committee, the Multiple Listing Committee, and the REALTOR ® Action Fund Committee. She can be reached at (805) 886-3970 or firstname.lastname@example.org.