You May Be Busier Than Ever in Southern California’s Hot 2021 Real Estate Market
Despite the onset of the COVID-19 pandemic last year, the Southern California real estate industry has remained strong. In 2021, markets across the state are forecasted to continue that momentum. With high demand, waning unemployment rates, and rapidly rising home sale prices, real estate agents all across Southern California should gear up for another booming year.
2021 Southern California Real Estate Outlook: Hot
In November 2020, the average home in California was priced at $609,757, a 9.0% increase year-over-year. There’s little sign of prices stalling, though, as Zillow predicts this figure will rise another 10.6% within the next year. Rising prices echo the gradual healing of the economy statewide, signaling that this year could be profitable for agents and sellers alike, while low-interest rates maintain some degree of affordability for buyers.
Along with rising home prices, home sales statewide grew 34.0% year-over-year in November 2020. Inventory also fell a significant 27.5% over the course of the year. Between lasting low-interest rates bolstering demand and consistently low supply, Southern California is a seller’s market as 2021 unfolds.
After the economic tribulations of 2020 and in the midst of a national big city exodus, rent prices increased 4.3% statewide but fell 5.6% in the Los Angeles metro area. Meanwhile, only 0.3% of California homeowners fell delinquent on their mortgage, and equity slipped into the negative on only 1.5% of homes statewide. So, while new renters and buyers alike flock to Southern California, current homeowners continue to thrive as well.
2020 Southern California Real Estate Market Data
|Zillow Home Value Index||$609,757|
|1-Year Change on Home Values||+9.0%|
|1-Year Change on Rent Prices||+4.3%|
|Homes With Negative Equity||1.5%|
|Delinquent on Mortgages||0.3%|
|Buyer’s or Seller’s Market||Seller’s|
Market Insights for Southern California
In November 2020, the California Employment Development Department reported that California’s unemployment rate had dropped 1.8%, landing at 9.3% statewide. While still higher than the national average, Southern California’s improving job market shows promise. As healthy economic activity often correlates with growth in the real estate industry, narrowing unemployment rates are a positive sign for agents the year ahead.
Despite the traditionally hot spring and summer buying seasons far behind us, closed sales increased a whopping 13.0% year-over-year in October 2020. This momentum illustrates a departure from the typical seasonality of home buying and is a good sign for the coming winter months. Buyers are still eager to commit, even without the draw of spring curb appeal and open houses.
This momentum isn’t limited to just residential either - commercial real estate is heating up, too. Last year saw nearly $3 billion in five high-profile commercial real estate deals alone. Highlights include a $1.65 billion investment in a Hollywood portfolio, the $430 million purchase of U.S. Bank Tower, and the $400 million purchase of the Forum Arena. These major investments in Southern California’s economy are yet another bright spot in the coming year.
With a strong 2021 forecast, Southern California real estate agents will need to be at the top of their game. From buyers battling rising prices to sellers fielding multiple offers, there has never been a better time to serve your fellow Californians. This year, agents can expect to benefit from and help contribute to a booming local and national economy as the Southern California real estate market heats up.
Take On 2021 With the Best California Real Estate Courses From The CE Shop
Enroll in our Pre-Licensing program now to get your career started and begin connecting your fellow Californians with the home of their dreams. Or keep going strong with one of our comprehensive, 100% online Continuing Education packages. Want to stay up to date on everything California? Join the Western Real Estate Facebook Group!