For all the turmoil that 2020 brought, one positive through line for the year was the real estate market. Locally, numbers were on the up and up, even as volume remained low.
According to First Tuesday, 2020 ended with strong sales across California, a 12 percent increase year-over-year. However, the unseasonably high sales aren’t necessarily indicative of a blockbuster year, as California home sales ended 2020 roughly level with the prior year.
In total, some 1,700 more home sales closed in state during 2020 than the prior year, amounting to an 0.4% increase in sales. First Tuesday looked at data from DataQuick and estimates that California’s sales volume is expected to languish until 2023, due to:
- fewer participating first-time homebuyers than normal
- lower homeowner turnover to buy an upgrade or relocate due to negative equity (once the foreclosure moratorium ends in 2021 and distressed sales drag down home values)
- reduced home inventory across the state
- the job losses of 2020, half of which are still absent from the jobs market going into 2021
First Tuesday forecasts that the forward trend in California home sales is mixed for both buyers and seller. While buyer income is going further, volume is expected to languish in 2021, due in large part to an unstable jobs market.