In Southern California, sales volume and prices are soaring upward as the market continues to make strives towards a recovery. It has been commonly seen that the market has been shamelessly very active over the past several months.
The recent activities at open houses are displaying herds of homebuyer. It is becoming a common average for new listings to see closer to 100 guests during the broker’s opens and Sundays’ public opens. Many of the new listings are bringing in multiple offers and selling several percentages over original listing price just shortly after the public and broker’s open houses.
Voluminously, investors have been securing many properties. Many investors are leasing out these properties to collect a fixed flow of revenue. According to the National Association of Realtors®, investors are paying for homes with all cash only 3/4th of the time. This suggests that there are still a percentage of individuals that are resilient to the intimidation of rising mortgage rates.
It is certainly a result of the inexpensive money; skintight inventories levels, and investor eagerness to buy that has been driving home prices to new highs. Albeit the climb in values, home prices are still within a great distance from the last peak in 2006. Particular economists are advising that home prices in some areas have ascended too quickly to be considered stable. Cautionary measures should be considered, as the rises are not being supported by major improvement in the fundamentals—particularly in the areas of income levels and jobs growth. Lawrence Yun, chief economist at the National Association of Realtors®, stated that, "Home prices need to moderate" for the simple fact that, "it is bad news in terms of affordability and certainly not sustainable for prices to rise and incomes to lag."