There's a pandemic, but Southern California home prices are at record levels

[Zorro]

In the middle of a global pandemic, Southern California home prices keep setting records.

The six-county region’s median price reached $600,000 in August, up 12.1% from a year earlier, according to data released Wednesday by DQNews.

That was the largest percentage increase since 2014 and the third consecutive month during which prices set a new all-time high. Sales rose 2.4% from a year earlier.

“We have had houses with 40 to 50 offers,” said Syd Leibovitch, president of Rodeo Realty, which has offices throughout the Los Angeles area. “It’s just bizarre.”

https://www.latimes.com/homeless-housing/story/2020-09-23/southern-california-home-prices-jump-12-percent-in-august

[customerserviceguy]

1. This is probably

strictly in the suburbs. I'm sure that a lot more people are going to engage in telework, because their employers realize that expensive downtown office space is not necessary for the functioning of many businesses. This will have a ripple effect on shops and restaurants in downtown areas of major cities.

[Backseat Driver]

2. IDK - Buyers need quite a bit more cash than is reflected by a lender's pre-qualification. Even then

in a bidding war for a property, they may not get the nod.

"Compared with low-wage workers, people who tend to have the financial ability to buy homes have been far less likely to lose their jobs, and in some ways, their ability to purchase a house has only expanded."
++++++++++++++++++++++++++++++++++++++++++++++++

I don't really think their ACTUAL ability to purchase a house has expanded; it just appears that way. Even well-qualified home buyers are faced with low-ball and/or higher list pricing and forced by sellers to "bridge the (cash required) gap" following appraisal and inspection at the time of closing, and that amount is much higher, over and above, whatever financing down-payment is required and/or the price-point a buyer has been pre-qualified by their lender. In "hot markets," whatever agenda a seller has in mind isn't really that well-reflected with the "asking price." We've been seeing properties go into contract in our "hot market" town in hours of list and chosen physically sight-unseen by a buyer from the digital public listings. There is also a lot of competition for moderately priced previously owned properties: flippers with minimal margins but deep pockets, cash sales by investors; down-sizing of late boomers and Gen X professionals who are releasing their high-priced McMansions onto the market; persons that were beneficiaries of large familial death benefits; the two-professional-income" family.

Hard-working/hard saving single persons, let alone low-wage workers, don't really have much of a shot to get the nod in bidding wars that produce double-digit numbers of bids. Some sellers request "love letters" to determine their choice of buyer? Really? A subjective acceptance required for a modestly average 2-3 bdrm, 1-2 bath home in suburbia of less than 1500 sq ft?

[DarthDem]

4. Good points

You just can't discount (pun not intended!) the influence that all-cash buyers have on the market, and right now you have to think they're probably figuring real estate is a safer investment than the stock market, right? So it could be difficult at the moment for so-called "middle class" (I try not to use that term too often) people to find inventory and beat out the cash buyers. That happened after 2008-2009, coincidentally enough the last time GOPers sat in the White House.

[Auggie]

3. Prices in wine country and Tahoe are also setting records

[Mr.Bill]

5. I think that's also representative

of the new work-from-home people. If I made enough money, San Francisco would be an exciting place to live, but I'd much rather be in Napa or Lake Tahoe and have three times the house. Although Napa and Tahoe haven't been cheap for many decades.

I have a friend who lives in SF. He lives in a 700 sq ft one bedroom condo with no balcony or other outdoor space. He has one parking space in a covered common garage. He pays $300 a month for a second parking space in a garage two blocks away. The last unit like his in the building sold for 1.75 million. Yeah, you can do better than that in Napa or Tahoe.

[Backseat Driver]

6. More new fires in "wine country" tonight.

Firefighters are exhausted and the landscape is charred; ever increasing risk to live one's life here at such expense. SMH

https://abcnews.go.com/US/wireStory/california-fire-scorches-wine-country-san-francisco-73291635