What Will 2025 Bring For the Housing Market?

A Merry Christmas Santa

Predictions don't always work out, so in the meantime, please enjoy your December holidays, however you  celebrate them!

2025 will possibly bring:

California median home price of $909,000, a 4.6% upward growth in price.

Statewide higher sales volume than the previous 2 years at 304,000 (but that's 100,000 lower than 2016 sales).

A continued housing affordability index of only 16%, compared to 31% in 2016.

A 30-year fixed rate mortgage of 5.9% (watch for Fed's meetings December 17 and 18).

Insurance costs are still rising along with stock market volatility.

Housing inventory has been increasing (as seen in higher sales volume figure) so that means it may be easier to make a move than in the last 2 years. When sellers can sell, more buyers are able to enter the housing market.

Election outcomes? **If capital gains exemption (some Congressional efforts have been made in the last 2 sessions) is doubled as hoped, that will be another big step for many sellers to move forward. An increase from a $500,000 exemption to $1,000,000 will be a huge help for the California markets. **Will state and local income tax (SALT) deductions increase for California? **Will tax cuts and tariffs help or hinder inflation--because some economists suggest that tax cuts will hinder a decline in mortgage rates. **And, the controversy of deportations may also suggest that deporting immigrants with no documentation is not likely to affect the housing inventory crisis at all: it's actually the millennial generation which has driven the increase in numbers of new households, while only 4.8% of U.S. households have immigrants here illegally. Housing shortages are also a result of land cost, construction costs, and housing programs that need to  be fixed. Read the link at Stateline for more on this issue.

Home insurance will probably continue to rise for some owners, depending also on location. Owners with newer roofing and updated electrical (a problem in some property sales) will fare better with their insurance companies. Contact your insurance agent to find out what you can do to avoid a premium increase as much as possible, and visit the CA Department of Insurance website for more information.  This is important, because 31% of homebuyers in 2024 had problems obtaining home insurance on their new purchase, and a buyer cannot close escrow unless the lender sees proof of obtaining insurance.

Long Beach Market, November:

In November, a single family average price for the city was $1,183,570, an increase of +3.2%.

The average price for a condominium was $580,235. 

The average price for a duplex was $1,151,280, an increase of 0.8%. Living in one and renting out the other could be a great option for some buyers.

If you would like to know more about your property value, just contact me.

And have a Happy New Year!

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996

Are You Voting on California Ballot? You Should.

If you are not registered to vote, please do so now so you can vote in the upcoming election.  

Did you know:

California is highest in state income tax - over 13%. (some states have no state income tax)

California is highest in sales tax - 7.25%, plus local city taxes on top of that.

California property tax - 19th out of all states.

Propositions affecting our property, aren't we paying enough taxes already?:

Proposition 5 - Allows local government to request bonds for affordable housing and public structure with only a 55% approval, down from 66.66% current requirement. Will raise our property taxes - vote NO.  

Proposition 33 - Expands local government authority to enact rent control on residential property. This is the 3rd attempt by Michael Weinstein and his multi-million dollar special interest group, AIDS Healthcare.  It will revoke the Costa-Hawkins Act which exempts single family homes, townhomes,  condos, the rent can be raised to market level. If Prop. 33 passes, these properties will come under rent control (Current Exemption from rent control: Single-family homes and condominiums, as well as construction after 1995, are exempt from rent control.)  Vacancy decontrol will not be allowed if law passed by municipality, this proposition can tell landlord what to charge for a vacant unit, owner may never be able to catch up to the current market rate by being forced to cap rents at lower amounts, thus causing owner to defer maintenance which now costs more than 10-15 years ago when the tenant moved in. Renters may think they will start getting lower rent if this passes, but first, cities have to pass local laws, and each city may be different. In spite of ads that say 33 will fight corporation takeover of rental properties, in actual fact the majority of rental properties in California are owned by small independent owners, i.e., families who inherited or bought years ago. This proposition is already causing private owners to sell their rental houses which are being bought up by new owner occupants, so that much more rental housing is being taken off the market, further decreasing the rental supply.  Vote NO.   Go to https://votenoprop33.com/

Proposition 34 - Health care providers, see previous paragraph, who get discounted federal money for their healthcare programs are turning around and reselling that program for a profit, and then are spending it on their tenant initiatives (see Proposition 5), not on their health care programs.  Vote YES to require discounted federal money profits to be spent on healthcare, not on special interest groups and their political propositions.

You should have received the booklet explaining all ballot propositions, please read it!

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996