East County News Service
February 7, 2019 (El Cajon) – The California housing market will continue soft in 2019 as prices remain flat and sales pull back because buyers are expected to remain on the sidelines throughout the year, according to California Association of Realtors (CAR) senior economist Oscar Wei.
At CAR’s recent “2019 Housing Market Outlook” presentation to members of the Pacific Southwest Association of Realtors (PSAR), Wei said, “The overall market will continue on a declining trend. Any growth will be at a very modest pace.” The Feb. 6 presentation was delivered at PSAR’s East County Service Center, 1150 Broadway, El Cajon,
Wei said current market fundamentals, including positive job growth, income growth and household formation, are still solid even though sales are down double-digits despite recent declines in interest rates. He also said if a second government shutdown occurs, similar to the recent 35-day partial shutdown which exacerbated partisan divisions, then the real estate market and U.S. economy could be negatively impacted.
Wei also told PSAR members that a window of opportunity is currently open for buyers as price growth remains near its lowest levels since early 2012. “Many should buy now before interest rates climb higher in the near future,” said Wei. “Inventory levels are improving, yet a tight supply led to one third of sales closing above asking price in 2018. The Fed has raised interest rates nine times since December 2015. If interest rates increase too fast, then economic growth will come to a halt.”
Wei also offered highlights from CAR’s annual homebuyers survey, including:
- Most recent buyers ended-up compromising in some way, either by paying a higher price for a smaller home than desired or living a farther distance from work or schools.
- The reasons why most buyers delay buying sooner include saving for a down payment, waiting for finances to improve and prices to stabilize or difficulty qualifying for a mortgage.
- 80 percent of recent buyers had been saving for buy for more than one year.
- The net cash gain to sellers of roughly $200,000 has been the highest since 2006.
Wei also said seven out of 10 Americans still believe that owning a home is an important part of the American dream, and 45 percent of home shoppers plan to purchase within the next five years.
PSAR, a 3,200-member real estate trade group for San Diego-area realtors, operates three service centers in El Cajon, Chula Vista and San Diego’s Clairemont Mesa area.