September 2020 California Housing Sentiment Index
Each month C.A.R. (California Association of Realtors) surveys 1,000 California consumers regarding their sentiments about various aspects of the housing market or the economy that directly impacts housing to create a California Housing Sentiment Index.
The results of the individual indicators are combined into an equally- weighted diffusion index (a diffusion index refers to the common tendency within a group of numbers or statistics) where anything over 100 represents a net positive sentiment across the indicators, and anything below 100 represents a net negative sentiment.
Huh? We explain everything below. 😉
Here’s the breakdown of how people feel about the housing market.
Overall, consumers feel pretty good about the market with a rating of 80, which is up 4% from August and up 8% from July 2020.
Question: Is it a good time to buy a home? 🏡 Poll Results: 34% say yes, now is the time to buy, and 67% think this is not a good time to buy. That’s up 1% from the previous month.
Our Take: Based on the past few months, we think it’s a good time to buy a home. While inventory may be down, and it may take a bit longer to find the perfect home, interest rates are still incredibly low so that affordability is up. Housing prices are on the rise, so waiting will cost you in the long run. Also, take a look at Libby’s latest article “Should You Move Up or Buy a Second Home?”
Question: Is it a good time to sell a home? 🏠 Poll Results: 58% of Californians think this is a good time to sell a house. That’s an increase of 4% over the August 2020 poll.
Our Take: Definitely yes! Demand is strong right now. Buyers were out of luck during the strict lockdown and they are lining up to buy. Again, interest rates as so low that more people are able to afford to buy right now. If you’re thinking about selling, this could be the perfect time for you.
Question: Will it be easier to find a home over the next 12 months? 🖥 Poll Results: 40% of respondents think it will be easier to find a home in the next year, while 60% don’t think it will be easier.
Our Take: This one is a toss-up. The market always fluctuates, and that is difficult to predict. But we expect things to get easier as we get used to the new normal and people get on with their lives. So I guess what I’m saying is that we think it will be easier to find a home as time progresses, barring any new cataclysms.
Question: Do you plan to purchase a home in the next 12 months? 💻 Poll Results: Only 8% said they plan to buy a new home in the next year. That’s up 1% from last month. That leaves 92% that don’t plan to buy in the coming 12 months.
Our Take: You probably know that people only buy or sell about every 7 to 10 years, so we wouldn’t expect this number to be very large. If you consider that Contra Costa County has a population of 1,160,920, then 8% of that would be 92,873 buyers. That’s a pretty large pool of would-be buyers. I don’t think even Libby and I could handle that amount! 😁
Question: Will home prices rise in the next 12 months? 💲 Poll Results: 53% of those who responded think home prices will go up in the coming year. That’s up 7% from August. So 47% don’t think home prices will rise over the next year.
Our Take: Prices have been on a steady increase in our area. I hate to tell the 47% who don’t think prices will rise they are wrong, but they are wrong. Prices will continue to rise in the next year and for the foreseeable future.
In August 2020, the median list price of homes in Contra Costa County, CA was $689K, trending up 13% year-over-year. The median listing price per square foot was $427. The median sale price was $725K. ~Realtor.com
Question: Will overall economic conditions improve in California in the next 12 months? 📈 Poll Results: At only 39%, 9% more say yes than last month, the economy will improve in the next year. 61% still don’t think so.
Our Take: This of course depends on your current circumstances. Your personal economy might be fine right now. (We hope it is!) If they develop a vaccine relatively soon, and they ease restrictions, the economy should start to rebound. We are taking a positive approach to this and predict that for most, the economy will improve in California in the next year. 🤞🏻
Question: Will interest rates fall in the next 12 months? 📉 Poll Results: 48% say yes, interest rates will drop while 52% of pollees think they will not go any lower. An increase of 6% for the noes.
Our Take: Rates are so low right now, we expect them to stay pretty flat for the time being. Interest rates always fluctuate, just as the real estate market does. We don’t see significant changes ahead in the coming year. Just for your information, we have placed the current rates for this week below. The average 30-year mortgage is at 3.04%. We remember when it was 16.63% in 1981!
|Description||APR This Week|
|30 Year Fixed Conforming||3.040%|
|15 Year Fixed Jumbo||2.550%|
|15 Year Fixed Conforming||2.540%|
|30 Year Fixed Jumbo||3.090%|
|5/1 Year ARM Conforming||3.330%|
|5/1 Year ARM Jumbo||3.380%|
Despite the Housing Sentiment score of 80 that we mentioned at the beginning of this article, it actually looks like Californians are slightly pessimistic (based on each poll response) about the real estate market and the economy according to this poll. Keep in mind that this was just 1000 consumer opinions from throughout the state.
However, as your local real estate experts, we are optimistic about the market and the future of the economy.
Like all things, your results may vary. Your particular circumstances, needs, wants, and plans are unique. We hope this information helps you sort out what public opinion looks like, but it’s important to keep your own views and situation top of mind.
If you would like some help figuring out if this is a good time to buy, sell, or hold, we can help.
After all, that’s what we do.
We would also like to know what you think about these poll questions. Please leave your thoughts below in the comments section.