If you had to guess what parts of the U.S. are most desirable to homebuyers, you’d likely include California… but you’d be wrong.
In fact, rising prices and slipping inventory across California’s metropolitan areas — particularly the Bay Area — have frustrated homebuyers turning their sights elsewhere, or resigning themselves to renting for the time being. Across the nation, less costly areas like Atlanta, Las Vegas and parts of Texas are poised to see the most growth. Has California simply become too expensive for homebuyers?
California homebuyers aren’t on the endangered species list yet. However, high rents in California mean it takes longer to save and down payments are ultimately smaller. This means first-time homebuyers have their sights set on less costly options: small in-town condos or homes in far-flung suburbs.
While California is further down the list for housing desirability in 2016, these are the neighborhoods that have seen the most growth in page views and favorites on Redfin from individuals hoping to buy (in order of market “hotness”):
- In Los Angeles:
- the Mount Washington neighborhood is designated the “hottest”, with homes lasting only an average of 18 days on the market;
- Adams Square; and
- In the Oakland-Fremont-Hayward metro area:
- Glenview is “hottest” with homes averaging only 13 days on the market before selling;
- Piedmont Avenue; and
- Maxwell Park.
- In Orange County:
- El Camino Real, with homes on the market an average of 32 days before selling;
- Northwood in Irvine; and
- Westpark II.
- In Ventura:
- Midtown, with homes on the market an average of 31 days before selling;
- Eastside; and
- Ventura College.
- In Riverside-San Bernardino-Ontario:
- Wood Streets, with homes averaging 20 days on the market;
- Murrieta Springs; and
- Chase Ranch in Corona.
- In San Diego-Carlsbad-San Marcos:
- Carmel Mountain with homes averaging 20 days on the market;
- Rolando; and
- North Miramar Ranch.
- Finally, in the San Francisco Bay Area:
- Outer Mission with homes averaging 16 days on the market;
- Central Belmont; and
What makes these neighborhoods stand out for today’s homebuyers? Primarily, lower price points and access to public transportation make these areas “hot” homebuyer markets.
Of note, the list above goes contrary to a recent analysis of the most competitive neighborhoods in California’s major metropolitan areas. In other words, neighborhoods homebuyers are most interested in do not match up with those that are most competitive (i.e. neighborhoods with the highest homebuyers-to-listings ratio).
This signifies homebuyers are reluctant to compete for their home purchase and prefer a smaller or farther away home rather than a bidding war for the home in the more desirable location. Homebuyers are burnt out on rapidly rising home prices, which is compounded by stagnant income growth.
Agents: have you experienced a similar trend away from competition in your personal homebuyer interactions? Share your experiences in the comments below!