When will the house prices go down in California?

Question

I live in southern California and the house prices are insane.

In my city the average home is about $550,000-$650,000

That is for a older home with about 1500 sqaure feet and without a large backyard.

I wanted to buy another home, or sell my home and buy another one, but at these prices I will be paying too much for a loan.

Will the prices go down or level off? Isn't this how the market works? High prices then low?

Answer 1

Not anytime soon. I had just read an article about real estate across the country and it was basically saying that the prices are going to keep going up in California.

Answer 2

Don't hold your breath. Bottom line, there are more people than homes, and in California's metropolitan areas, there isn't much land left to build on.

Housing prices are a function of demand, availability, and interest rates. I don't see demand and availability changing much, because people keep moving to California, but interest rates are going up which should cool off the market. You're not going to see big drops, but you will see housing prices stay flat or grow slowly for a while. Maybe if interest rates keep going up, you might see prices going down a little, briefly.

I'm sort of in the same boat. I could afford a home a few blocks away from where I live, that is a bit bigger than my current home, and has a garage (which I don't), if the mortgage rates were equal. But I got in when mortgage rates were at an all time low. I couldn't afford to make the payments at today's rates. But then again, the reason I can afford that home, is because it's price has been held down due to the higher interest rates. Otherwise it would be out of my price range. In other words, I'm stuck!

Answer 3

2

Answer 4

I'm a broker and investor in Southern California (in Irvine). Local economists state that the prices won't go down in Orange County, instead you will see appreciation returning to normal 6%-8% levels for the next two years. I tend to agree with them because the construction cost have risen recently which increases the replacement cost. Also, demand in Southern California is still high.

If you're interested in knowing your options, you can contact me and we can go over the specifics of your situation and I can show you your best options. Since I am an independant broker with a keen knowledge about real estate investing, I can do more for you at a lower cost. Whether it is a home loan, buying or listing your property. For example, I can list your home for 3% total commission or split my commission with you on any home you buy. I can find you the best loan program that meets your needs and I will actually show you how much money I make from the lender if I charge you a certain rate (I have nothing to hide). If you live in your current property less than 2 years, we can do a 1031 exchange. We can also do a bridge loan so you don't have to wait for your home to sell before buying your new home. We might even determine to keep your existing home and use the equity (if need be) to put down on your new home. There are so many options based on your situation that we can discuss. I personally believe that real estate is not just about buying, selling or acquiring loans; It's about finding the best solution that meets your needs and those of your kids.

Again, contact me if you want to discuss this. My license number is 01737366 and can be verified at www.dre.ca.gov.

Regards

Answer 5

SEriously, prices right now are the softest they have been in many, many years and as interest rates continue to go up, it is not going to get any cheaper. Your best bet is to make sure you have good credit so that you get the best rates possible and make the jump as soon as you can afford it.
Real estate markets are not like stock markets, the appreciation maybe can be higher and lower, but, overall, people don't buy their homes with cash. They borrow for them which means they are not able to sell at a loss without huge consequences. The only property that really looses value (prices go down) is slum/ ghetto areas.
My advise - work with your credit to get it up over 720 for the best rates and make your move sooner rather than later.

Answer 6

Actually, interest rates are going up..... so the prices of houses will start to drop. I live in So-Cal too.... it's crazy out here!! So.... if you bought a house with a short term stay in mind.... you're gonna be screwed if you want to sell. If you want to buy a home, just wait a little while and pick up all the repo's that will be happening soon or the ones that already are happening!!

Answer 7

so long as a lot of people want to live in Southern California, the prices won't drop. they might freeze or rise slower based on the demand.


You can count on the prices dropping when/after
LOTS of people start leaving the area, and leaving lots of empty houses. If the sellers can't sell the houses fast, the prices will drop.

Answer 8

When the region starts to see a consistant and length negative growth rate of population. The prices are inflated because there is still a health growth rate in population in California.

Answer 9

untill everybody moves out( caz everbody is moving to texas, arizona, bakers field all those kind of places) and then they'll have to put the prices down, i just bought one for 600,900 and it's near the beach. i think u should buy one now un till the prices r much higher.

Answer 10

When Bush it out of office, and oil prices plummet soon afterwards. Then the housing economy will follow suit.