California’s light-speed housing boom driven by FOMO
California’s light-speed housing boom driven by FOMO
In January, California beat an almost 18-year record for a single month's home sales and pricing spike. The last time prices and sales rocketed up more than 20% in a single month? August 2003. In real estate, it's called the FOMO Effect: fear of missing out.
MARIN COUNTY, Calif. - In January, California beat an almost 18-year record for a single month's home sales and pricing spike. The last time prices and sales rocketed up more than 20% in a single month? August 2003.
In real estate, it's called the FOMO Effect: fear of missing out.
According to California real estate sales tracker and publisher FirstTuesday, in round numbers, California racked up 439,000 homes sales in 2020, better than the booming sales of 2019.
"In 2021, we're seeing that again in the first couple of months this year," said Northbay Realtor Kathee Shatter, who also said in Marin County, the number of sales is up a whopping 50% over last year's big year, one of the best showings in a state with many regions selling like hot cakes. "Even before it's on the market, if there's a whiff of something coming on the market, you will be guaranteed of five to 10 agents approaching you with clients," said Ms. Shatter.
As we near the end of the first quarter of 2021, for a state, that pundits said said, was facing a mass exodus, what's the 'hard numbers' reality? By Region, year over year, January Bay Area sales soared up nearly 32% Central Coast, up almost 20%. Southern California, up 13.5%. Central Valley: up almost seven percent. Far Northern California, slightly down just 5.3%.
"The inventory is the lowest we've seen in years," said Shatter.
Fewer homes available for sale drives prices higher. Many people are simply reluctant to move in the pandemic. Another key factor: the moratorium on foreclosures as well as evictions from rented homes has kept an unknown number of homes off the market.
"The prices are the highest we've seen. And, just up until a couple weeks ago, the interest rate are the lowest we've seen in a long time," said Shatter. That's resulting in fast sales, multiple offers, many all cash offers and offers above listing. "Comfortably expect to get 5 to 10% more and maybe more than that. Most everything is is in escrow within seven days," said Shatter.
One example, Real Eastate Broker Sam Benson tells me he sold a home in Walnut Creek. The asking price was $1.25 million. There were multiple offers. The selling price $1,525,000; $275,000 over asking.
The whole thing could get worse for buyers and sellers If lenders get greedier with ever rising interest rates, simply because they can.