How safe is Corona, CA Real Estate Market in Q1, 2022, by Kamesha Keesee.

How safe is Corona, CA Real Estate Market in Q1, 2022

By Kamesha Keesee

There are three major indicators of a market crash. These are the economic downturn, high inflation rates, lending practices, and the supply and demand dynamic in Corona.

HOUSING SUPPLY

Later this year, new construction will supplement the current inventory. As a result, construction activity has increased towards the end of 2021, despite a lack of building labor and materials.

In November, construction spending in the United States increased by 0.4 percent, while residential expenditure increased by 0.9 percent. Singlefamily homebuilding increased by 1.2 percent, while multi-family housing spending fell by 0.3 percent. Overall construction spending has gone up 9.3 percent year on year, but a portion of the increase can be attributed to the increasing cost environment.

The Producer Price Index (PPI) for building materials, for example, increased by 1.5 percent in November. Supply constraints may ease later this year, but COVID will continue to pose a threat to public health in the short term.

HOUSING DEMAND

For the most part, 2021 was characterized by a supply-demand imbalance. With demand high, homebuyers were paying well over the asking price. According to market competitiveness slowed towards the end of the year than a month ago, but still high regardless.

Statewide, the median sales-price-to-list-price ratio remained above 100 percent; however, that figure dropped in November to101.4, the lowest since March 2021. As a result, homes are flying off the shelves at an alarming rate.

The median number of days required to sell a single-family home in California was 11, unchanged from October and up from 9 days in November 2020. This trend is expected to continue through 2022. With new housing being built, inventory will remain tight for the foreseeable future.

The housing demand in Corona outweighs the supply and cannot be met. This implies that inventory will not be idle; instead, it will move quickly. Home values will rise as a result of this demand. This indicates a healthy housing market. This will continue to be the case throughout the year as people move to Corona.

PRICE APPRECIATION

According to Redfin.com, Corona, CA’s housing market is highly competitive, with a score of 70

out of 100. Last month, the average Corona house price was $738K, a 25.7 percent increase over the previous year.

The California Association of Realtors forecasted Thursday, Oct. 7, that the state’s white-hot real estate market is projected to cool in 2022, with price gains moderating and sales declining. However, most buyers’ inability to afford California’s ever-increasing home prices will continue to affect the state, driving even more residents out.

HOME SALES

Housing experts project sales will fall 5.2 percent next in 2022, with 416,800 homes changing hands. Although home sales in greater California are expected to drop this year, 2022 transaction volume is expected to be the second-highest in the last five years.

It will also be slightly higher than the annual average of 414,000 transactions since the housing market began to recover from the Great Recession in 2012.

FINALLY

The lending rules are much stricter now than they were in 2007. In 2007, it was possible to purchase a home without a credit history, and down payments were meager. That meant that anyone could buy a house. This subprime lending inflated the housing bubble and caused home values to plummet. As a result, those who obtained mortgages could not service them, resulting in the 2008 financial crisis.

Lenders are now lending to people with excellent credit scores to reduce the risks involved. Lenders will now thoroughly examine applicants’ financials before approving loans. In addition, banks now require applicants to make a substantial down payment and demonstrate their ability to repay the mortgage. This indicates that what occurred in 2007-2008 will not be repeated.