According to recent reports from local appraisers, the coronavirus has yet to hurt Southern California home values which continue to rise despite the pandemic.
The Real Estate Research Council of Southern California has tracked home-value changes twice a year since 1943, continually monitoring and re-evaluating the same sample of 308 single-family homes across our seven local counties. Their latest report from April shows SoCal home appreciation at a 3.8% annual rate, rising faster than our 2.8% gains six months ago in October. However, compared to the price increases seen one year ago in April (5.3%), they’re lagging behind the average annualized gain over five years of 5.6%.
How did coronavirus affect the real estate market?
When the COVID lockdown began in March, home sales quickly dropped – but did not stop entirely. Rising unemployment and stay-at-home orders paused the actions of many homebuyers, however, historically low mortgage rates and steady home values helped keep the essential business of buying and selling homes moving forward virtually.
Though some were waiting for home prices to drop, the healthy and balanced real estate market remained intact. Because supply and demand dropped proportionally during the lockdown, their relationship remained unchanged by the pandemic and wider economic downturn. There was a shortage of inventory for quite some time, even before the pandemic.
A crash causing prices to plummet (like 2008) only happens when demand is low and supply is very high – previously caused by mass foreclosures. Which we also won’t see any time soon as the federal government has placed a moratorium on foreclosures, with the mortgage industry offering forbearance for up to one year to homeowners who’ve been impacted financially by the coronavirus.
Today: A seller’s real estate market
The Southern California market has officially begun to rebound from COVID, hit hardest in March and April. Now we are seeing <homebuyers flood the market with the pent-up demand from a slow spring real estate market.
With inventory still very low, prices rising, and an uptick in buyers caused by low mortgage rates, we officially have a strong seller’s market in SoCal. For most homeowners, this marks the ideal time to sell in order to capture top dollar and be able to more easily afford a new home thanks to the low rates.
Southern California Home Value Trends
Below are the annual rates of home value appreciation from this April according to The Real Estate Research Council of Southern California compared to the average appreciation one year ago, including the ranking among all seven counties that are tracked.
#1 San Bernardino County
Annual rate in April: Up 5.7%
1 year ago: 5.7%.
#2 Riverside County
Annual rate in April: Up 4.7%
1 year ago: 5.9%
#3 San Diego County
Annual rate in April: Up 3.9%
1 year ago: 5.1%
#4 Ventura County
Annual rate in April: Up 3.6%
1 year ago: 3.7%
#5 LA County
Annual rate in April: Up 3.5%
1 year ago: 6%
#6 Orange County
Annual rate in April: Up 3.3%
1 year ago: 4.1%
#7 Santa Barbara County
Annual rate in April: Up 1.6%
1 year ago: 3.1%