Is the Spring Housing Market Heating Up in Southern California?

By Kevin Smith

Kevin has excellent interpersonal skills; a strong negotiator, client focused service, and detailed familiarity with conventional sales, investments, and technology. He is also skilled at building effective and productive relationships aimed at retaining and creating new business opportunities.

If you’re keeping an eye on the housing market here in Southern California, there’s some encouraging news heading into the spring.

Mortgage applications have taken a big jump recently. According to the Mortgage Bankers Association, demand from home buyers is up, with applications increasing roughly 9% week over week and overall demand climbing about 11% compared to the last six to seven months. That’s a significant shift after the slower fall season, and it signals that buyers are coming back into the market.

Interest rates have come down, and the window is open. One of the biggest drivers of that demand is where rates are sitting right now. We’ve seen rates come down to around 6%, and some of my clients are locking in right around 6.10%. That’s a meaningful drop from where they were, and while rates have ticked up slightly due to geopolitical tensions overseas, they’re still in a range that creates real opportunity.

If you purchased a home three or four years ago, your appreciation has likely gone up quite a bit in that time. And if you bought more than ten years ago, you may be sitting on significant equity. A lot of homeowners right now are refinancing to take advantage of these lower rates, and the programs available are strong.

For investors, this is worth paying attention to. If you’re an investor who purchased properties a long time ago and have written off the depreciation, it may be worth looking into selling or doing a 1031 exchange. There are some real opportunities depending on the product, and I’m happy to talk through the specifics if that applies to you.

The spring market is bringing more inventory. Here in Orange County, there are about 3,900 homes actively on the market right now across all 34 cities. That’s up from about 3,400 during the fall, so we’ve seen a nice jump. About 600 new homes have come on in just the last two weeks.

Now, 3,900 might sound like a lot, but to put it in perspective, we should normally be closer to 6,000 to 7,000 homes on the market at this time of year. So we’re still well below the historical average, which means there’s less competition among sellers.

What this means for buyers. The combination of more inventory and rates in the low 6s means buyers have more choices right now than they’ve had in a while. There isn’t the same competitive pressure to outbid each other on every listing. If you’ve been waiting for a window where you have a little more breathing room, this is it.

And here’s something worth thinking about: if rates come down further, you can always refinance later. But locking in a home at today’s prices and today’s inventory levels means you’re building equity now instead of waiting and potentially paying more later. Getting pre-qualified at these rates could also help you stretch your budget and get into a nicer home for the same monthly payment.

What this means for sellers. More buyers are entering the market, demand is climbing, and rates are cooperating. If you’ve been thinking about listing, this spring is shaping up to be a strong opportunity. The key is still pricing right, presenting your home well, and working with an agent who understands the current conditions.

If you have any questions about what’s going on in the market, whether you’re looking to buy, sell, refinance, or explore investment options, reach out to me at 619-379-7664 or email kevin@kevinsmithsells.com. You can also visit blog.kevinsmithsells.com for more updates. I’m always happy to help.