6/04/2015

May 2015: Average Price of a Single Family Home in Long Beach CA: $590,000

The average price of a single family home in Long Beach at the end of May was $590,000, an increase from $427,000 in January of 2013. The overall market in California is characterized by fewer first-time homebuyers, lower homeowner turnover, static turnover in rentals. Employment levels are not expected to rise to pre-recession levels until 2019, even though California has regained all the jobs lost due to the 2008 recession. High level of speculation by investor buyers drove prices upward beyond the borrowing capacity of occupant buyers. California homeowners underwater in their home values is around the 9-10% level, and is another chunk of the population which is holding back movement in the market due to inability to move on.
Relocating baby boomers are anticipated to be a forward movement in selling and then buying -- however, that will vary greatly by geographic location in the state. According to an estate sale professional who works in the Long Beach area and is kept very busy with approximately three estate sales per week, it would seem many people in this area are not moving until the very end.
 Buy-and-hold owners may finally begin to let loose of their accumulated rental inventory (this has been a major impact in areas such as Riverside County), which hopefully will occur prior to a major rise in interest rates. (Interest rates bipped up twice yesterday.) This investor-held group is considered to be a massive shadow inventory which may not be released for another two-plus years, and at what price? For now, there is a gradual 3% annual increase in the number of new jobs, and a price-flattening trend compared to 2013 and 2014, all of which is helpful to bringing an upward trend in sales volume and inventory over time.

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