California Real Estate Market Snapshot – March 2011

Unrest in the Middle East, higher oil and gas prices, a rising stock market, and lower unemployment. How will the March headlines affect California’s real estate market? While the situation in the Middle East may be very unpredictable, the unrest there is unlikely to have a drastic impact on our real estate market. The higher oil price could lead to minor inflation, which could in turn have a small impact on mortgage rates. However, mortgage rates are long term rates and are, therefore, less reactive to such events. The improving stock market will enhance consumer confidence and that is directly related to buyer confidence, which of course is good for real estate. The unemployment numbers for February were better, but only slightly. Unemployment is headed in the right direction and that is a good sign. The March headlines have provided a mixture of good and not so good news. Hopefully, all of these factors will balance out and the real estate market should continue to improve, as it has for some months now. In the short term, we are looking for the market to strengthen. Spring is typically the best selling season while Summer is traditionally the best closing season. In other words, most contracts to buy are executed in the spring while most escrows close and buyers move in during the summer. January and February are often considered to be “the calm before the storm.” However, the storm we are referring to is a good storm for buyers and sellers. For now, the future looks bright!

Market Report

March, 2011 Current
Period
Last
Period
Last
Year
Month-to-Month
Change
Year-to-Year
Change
Existing Home Sales 546,420 520,080 532,870 5.1% 2.5%
Median Home Price $278,900 $305,020 $284,600 -8.6% -2.0%
Unsold Inventory Index 6.7 months 5.0 months 5.7 months 34.0% 17.5%
Median Days On Market 61.8 57.9 32.9 6.7% 87.8%
30-Year Fixed Mortgage 4.76% 4.71% 5.03% 0.05% -0.27

Source: California Association of REALTORS®

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