SoCal Home Sales Plunge in February

Recent statistics have shown that the housing market has stayed dormant throughout February – home prices have remained essentially flat while sales took a tumble – leading many experts to believe the market has flattened. The question on everyone’s mind now, how much price appreciation does 2014 have in store for us?
DataQuick reported earlier in the month that buyers have continued to hold back throughout the month of February while more homes were put on the market. While the median home price in Southern California inched up by about 0.8% from January, sales plunged by a whopping 12% compared to February of 2013 – lower than any February since 2008!

Prices have actually stayed relatively flat since June of 2013 – about 20% higher than February of last year – when we saw the market stabilize after many of the great leaps and bounds made by the market in months prior.
Now, many of the investors who had once flooded the market have left, and the market is relying on first-time home buyers and families looking for trade up keep the recovery going. The real question is whether or not this will happen in our still-weak economy.

There are a couple factors playing against these would-be homebuyers. While prices have stayed somewhat stable, many buyers still struggle with high prices and interest rates, pushing homes into a range where they are unaffordable. Paired with the lack of homes available on the market, many of these potential buyers simply cannot find a home they can afford.

In regards to the matter, Richard Green, Director of USC’s Lusk Center for Real Estate, was quoted saying, “We’ve basically run out of houses that people can afford. Three or four years ago, if you were a family making $60,000 there was plenty of stuff you could buy in Southern California. That’s gone.”

Whether or not we’ll see much appreciation throughout 2014 is still up in the air, but for the moment things are looking pretty grim.

Have you experienced a lack of affordable houses in your market?

Do you think the market will pick up in the upcoming months? We’d love to hear your thoughts!

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