Home median prices were at a record high in the L.A. and other neighboring counties. That changed when the coronavirus pandemic plagued Southern California.
Southern California on Record Pace Before COVID19
The real estate business in Southern California had been doing very well until the COVID19 pandemic came in. Agents sold their listings with multiple offers. But when the epidemic began to the U.S., it halted the momentum that they have been maintaining.
A Southern Californian Home has a median price of around $550,000 in March, while Hermosa Beach realtors in the South Bay Cities has reported a median home value of $1,855,014. Hermosa Beach properties have gone up 9.8%. Around 18,000 homes have been sold in Southern California, reflecting a strong economy when supply was still low.
But then COVID19 hit, reducing the housing activity by almost a half, since a state-wide quarantine order is currently ongoing, closing open houses and slowing down local business activity. Around Southern California, sales contracts for existing homes plummets to 48% while escrows are down to around 8,600.
Businesses and employees are affected. Massive job losses equate to lesser housing demands as millions of California residents file for unemployment, up until April 18. The most significant single-month drop in the consumer confidence index has occurred, dropping into a six-year deep low.
Real Estate Deals Continues
The business of real estate runs as one of the lifebloods of California. Even in the state-wide quarantine, homes are still getting purchased; under considerably lower prices compared to the last months without the coronavirus pandemic. There have also been a lot of obstacles that emerged due to the crisis. None-traditional mortgage disappeared like a bubble, lender appraisals nosedived in the last months, and the number of low-credit scorers has gone up.
With people setting up their offices at their respective homes, the managing and processing of housing paperwork are now getting done online, remotely and digitally, to exercise social distancing with cloth face masks. Instead of open houses and showrooms, agents cater to prospective buyers through the means of virtual tours. Some open houses have several protective measures implemented, such as hand sanitizers by the opened doors. Proper protocols are being observed both by real estate agents and prospective buyers to mitigate the infection rate of the coronavirus.
Aside from the ongoing COVID19 pandemic, citizens of California have another burden to carry; this time, it is human-made and came by the government; the AB 1482, or the rent control laws. Although a housing market crash close to a recession is far from possible, a significant housing market decline will most like be likely in the coming months after the COVID19 issue.