enerally, in the U.S. and Canada, housing real estate is really hot. In California, it’s scorching! California has always been attractive among homeowners. The weather is great and there are so many things to do within this large state. People can go to the beach or follow their Hollywood dream. In terms of entertainment, the Golden State does not lack exciting activities.
In other words, a lot of people have always been interested in living in California. However, in the last few months, houses are selling like hotcakes.
Record for California
In March, California saw a new record for how fast homes were taken off the market. The median time for homes staying on the market then was eight days.
According to the Los Angeles Times, this was the shortest time period recorded by the California Association of Realtors.
In 2017, the organization saw homes staying on the market for 14 days. During the real estate bubble from 2003 to 2005, the median period was 20 days.
Real estate pundits can’t remember the time that it was ever this short.
People shopping for houses are now feeling the pressure of making an offer for California homes within two days.
While people thought the pandemic would be bad for business, in general, residential real estate was ultimately found to be resilient.
This was brought about by the change in work practices. Most people were forced to work remotely in order to limit the number of times people have to go out of their homes and to bar a number of people from being confined in one place at the same time.
The result? People now need bigger homes!
The demand for bigger homes
When work-from-home arrangements were ordered by the government, families suddenly found themselves inside the same room for 24 hours.
The home became a multifunctional building--it’s where families eat and sleep, it’s where children go to school via online classes, and it’s where adults go to work remotely.
Regular homes became constricting, hence, the demand for bigger homes.
Also, people took advantage of the record-low mortgage rates being imposed.
Because of the demand and competition among buyers, some people have made offers for homes they haven’t even seen.
According to a report, 63% of homebuyers in 2020 made an offer to a property they haven’t even seen. That’s how frenzied the market was.
Bidding wars ensued
This resulted in houses selling more than its listed price.
According to a survey, 43% of houses sold from the second week of March to the first week of April fetched more than the price listed on the market.
What more, buyers are actually willing to forego some form of protection.
For example, real estate agents noted that a lot of homebuyers were willing to waive provisions that would allow them to renege on deals without penalties if there is a problem with the house during inspection.
Some buyers are also waiving their cash around, which makes it even more enticing to sellers since they don’t have to wait if a home loan has been approved.
Until when is this buying frenzy going to go on?
We will have to wait and see because experts didn’t even project that residential real estate will be among the hottest industries during the pandemic.