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California Real Estate News: Market Watch Update

California’s First Quarter Foreshadows Strong Sellers’ Market

Our Coldwell Banker Presiden, Mike James sends us a quarterly update on the state of the state so I thought I would share it with all of you. I've also included a short summary of the Monterey market from our office manager Todd Porteous. It seems like we are all on the same page with our assessment of the market. Entry level homes are selling fast and the anticipation of higher interest rates continue to influence the market.

From Mike James:

As the first quarter of 2017 comes to a close, California continues to show an abundance of active buyers throughout its markets while dealing with consistently low inventory. Reasonably priced homes spend minimal days on the market, often having received multiple offers, while overpriced homes are taking longer to sell.

According to the National Association of Realtors® (NAR) Pending Home Sales Index, in February there was a 3.1 percent increase in the pending home sales index in the West, rising to 97.5, which is a 0.2 percent hike from last year.

“Buyers came back in force last month as a modest, seasonal uptick in listings were enough to fuel an increase in contract signings throughout the country,” said Lawrence Yun, NAR chief economist. “The stock market’s continued rise and steady hiring in most markets is spurring significant interest in buying, as well as the expectation from some households that delaying their home search may mean paying higher interest rates later this year.”

A healing economy continues to increase the number of new buyers nationally and locally, while low inventory decreases many buyers’ options and increases their competition.

“While it’s encouraging to kick off the year with back-to-back yearly sales increases, moving forward, California’s housing market could lose steam in the long term as the Fed begins to adjust the federal funds rate,” said C.A.R. President Geoff McIntosh. “In the short term, however, the specter of higher interest rates may push buyers off the fence to purchase a home before mortgage rates move even higher.”

Moving into the rest of 2017, the number of buyers will continue to rise at a faster rate than new listings. Cash offers will continue to be more successful and popular because they stand apart from the abundant offers most listings receive.

From Todd Porteous:

The Monterey Peninsula market had shown signs of a slowdown at the beginning of the month but is seeing more activity at open houses. The under $1 million price point has been especially active. Affordability is always a factor on the Monterey Peninsula especially for first time buyers. New listings are incoming as homeowners prepare their properties after the storms. The month is slightly up in unit sales over March 2016 and even with dollar volume. The Monterey Peninsula continues to be one of the most desirable destinations on the central coast. The Carmel Chamber of Commerce Executive leadership committee reported that there were several repeat visitors that had been visiting the area for several years, and that there were seven home purchases that they knew from out of area visitors.

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