Updated: Dec 6, 2021
The housing market in the US has been on a tear in the past year. Following the economic impacts of COVID-19, home prices have gone through the roof as buyers fight over limited home availability.
The realities of the market make home-
buying a challenging prospect. Not only do homeowners have to find the right home, but they need to come prepared with a competitive offer. Fortunately, with the right knowledge, you can ensure that the home buying process goes smoothly.
In this article, we will take a look at a few things you should keep in mind when looking to buy a new home in California. With the right information and partner in your corner, you come out on top during your next home buying adventure!
Current Home Prices in California
To get an idea about what prices you can expect, it helps to know the current averages.
According to Zillow, the median sales price for a home in California is $708,000. This is a 21% increase in price over the past year, well above the national increase of 17%.
According to a recent study in the Los Angeles Times, here are some regional statistics regarding home cost trends in California:
Los Angeles County: Median price increased 13% to $785,000, and sales rose 14.3%.
Orange County: Median price rose 12% percent to $900,000, and sales increased 4.5%.
San Diego County: Median price rose 13% to $725,000, and sales increased by 3.5% over the year.
With prices rising, it is essential for those looking to buy a new home to work with a skilled realtor to find the best home at the right price. Knowing what goes into a house price can help you better plan and prepare for the future while negotiating the best deal.
What Goes Into California Home Costs?
When it comes to buying a home in California, there is more than just the sticker price. A variety of factors go into the final price tag on a home, including:
The property's assessed value, or how much the county says it is worth as a tax base.
HOA dues, if any.
Property taxes, which vary depending upon the assessed value of the house.
Fees for transferring deeds and other transaction costs.
A home warranty plan or home inspection to uncover significant problems with the property before you buy it.
Any moving expenses or relocation costs.
Here's an example: a single-family residence in California might cost $1 million. The seller, however, might offer to reduce that price by $100,000 if the buyer pays for an inspection and home warranty. Then throw in another $100 to cover transaction fees and transfer taxes. Suddenly the buyer can purchase a $1 million house for just $900,000!
Tips for Buying A Home in California
While the high prices may scare away many potential homeowners, the right strategy can be key to owning a home in California. Here are some tips to consider when you start looking for your California dream home:
1. Know Your Budget:
Before you begin looking for homes in California, it's important to know how much you can afford. While the median list price of a home is $600,00, this number may vary depending on the region.
With a mortgage calculator, potential buyers can determine the monthly payment that they would be comfortable with. So the next time you walk through a home and dream of the ocean view, make sure it's something you can afford.
2. Set Your Price Range:
Home prices in California depend on many factors such as location, condition, and size of the property and amenities included (such as pools or tennis courts). If you set your maximum price too high, you'll limit your options.
If you set too low a price, you may miss out on homes that could be perfect for you and end up overpaying for the home that fits your budget. A real estate agent can help you narrow down what's most important to you and then help determine a price range based on these criteria.
3. Get Pre-Approved:
Pre-approval is the first step to buying a home, and it's essential, to be honest about your finances.
Your credit score is one of the most important factors in determining your eligibility for a mortgage, so it's vital that you don't buy or apply for anything until you know your score.
Pre-approval will also show agents that you're serious about buying a home. Being approved for a loan means that the lender has done an initial review of your finances and believes you are capable of repaying what you owe.
4. Know Your Area:
With more than half of America's population living in cities, California is home to some of the country's most densely populated areas. You can choose to live in one of Los Angeles's many suburbs or stay close to the City through affordable housing options in San Gabriel Valley and San Fernando.
The Central Coast is known for its charming towns, while the South offers beautiful beaches, picturesque mountains, and exclusive communities.
5. Be Flexible:
It's important to consider your family's lifestyle when looking for homes. You may discover the perfect layout or home-style - only to realize that the price far exceeds your budget. One of the best things potential homeowners can do is widen their perspective on what constitutes the perfect home.
In California, you may find yourself looking at homes with elevators or community features such as pools or tennis courts. If the price is right, a little creativity can go a long way when it comes to finding your dream home in California.
Find Your Next California
Home with Scott Elmerick
The market may be hot right now, but trends are showing signs of cooling off - making it possible for more people to find their new California home. The first step in the process is to partner with the right realtor and mortgage professional.
As one of California's leading Mortgage Professionals, Scott Elmerick has helped countless families finance their perfect homes across the state. Scott has the expertise to match you with home loans based on your budget, location, and lifestyle preferences. From your first home search to keys-in-hand, you can trust Scott's team to guide you every step of the way.
If you would like more information about buying a home in California, call Scott Elmerick today!