2020 California housing market projected to close with more growth than expected
While numbers for December 2020 are still being finalized by MLSES and the California Association of Realtors, the state Realtor association stated in its weekly update to Realtors last week that preliminary estimates suggest 2020 ended with roughly 3 percent more home sales than the previous year. Given that activity virtually ceased during April and May when home sales were falling by more than 20 percent, it shows how strong the housing recovery was during the second half of 2020.
The housing market began rebounding from its pandemic slump in the summer. At the first Silicon Valley Association of Realtors district virtual meeting of the year last
week, Michelle Ronco, Aculist senior product marketing manager, said the market in all five MLS Listings counties (San Mateo, Santa Clara, Santa Cruz, San Benito, and Monterey) bounced back and listings continued to increase from July, with no summertime slump and peaks as late as fall.
Ronco told Silicon Valley Realtors, “Santa Clara County’s housing market has excelled in 2020 in both sales and sales volume compared to the previous year.”
Wells Fargo Home Mortgage private mortgage banker Caroline Wolf said last week interest rates have inched upward, but are still under 3 percent. Interest rates slightly increased from 2.66 percent for a typical 30-year fixed rate mortgage to 2.67 percent. The Fed has signaled an increased willingness to keep rates low, and although recent election results in Georgia caused the 10-year treasury rate to rise temporarily, according to C.A.R., the outlook for inflation remains dubious and low mortgage rates are still expected to persist through 2021. Additionally, although mortgage applications saw another decline, they remain above last year’s levels by nearly 5 percent.
Wolf advised Realtors to remind their buyers to get their documents and other important information to their mortgage officer so financing can be processed right away. Buyers should also get preapproved by their lender.
“Getting mortgage preapproval will also speed up the process and can give them an edge in the buying process,” said Wolf.
The C.A.R. weekly update likewise indicated the percentage of mortgages in forbearance has increased for three consecutive weeks. The percentage of mortgages remained constant at 5.3 percent, which is down from its peak during the summer, but the number of mortgages in forbearance were up. In addition, FHA and VA forbearance rates increased, which drove the overall numbers higher.
“The housing market rebounded well last year despite the pandemic, but if the public health situation does not improve, there is grave concern that losses could trickle down and affect the housing market. The continuing surge in coronavirus cases will continue to place restrictions on businesses and on our residents and impact jobs, rents and mortgage payments,” said Joanne Fraser, president of the Silicon Valley Association of Realtors. “We hope the new administration will be able to provide financial relief to the many families who are suffering, and step up the distribution and availability of the vaccines. Only then can our economy get back to a full recovery.”
Information provided in this column is presented by the Realtor members of the Silicon Valley Association of Realtors at www.silvar.org. Send questions on any topic to rmeily@silvar.org.