Best vs. Worst mortgage rates in CA for the second half of 2020
LOS ANGELES, CA – The US housing market continues to heat up in the second half of 2020. It is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic period.
For the first time since the pandemic began, all four major components of real estate activity—the demand, supply, pricing, and sales—are growing above the pre-COVID pace. The seller real estate markets in the pre-COVID period are in a better position for the recovery in sales in the coming months of the fall season.
With mortgage rates hitting record lows but consumers struggling financially due to COVID-19, the personal-finance website WalletHub today released its report on 2020’s Best Real-Estate Markets.
To determine the most attractive real-estate markets in the U.S., they compared 300 cities across 24 key metrics. The data set ranges from median home-price appreciation to home sales turnover rate to job growth.
Best vs. Worst
Berkeley, California, has the lowest share of homes with negative equity, 1.17 percent, which is 32.8 times lower than in Detroit, the city with the highest at 38.36 percent.
Berkeley, California, has the lowest average number of days until a house is sold, 34, which is 8.1 times lower than in Miami Beach, Florida, the city with the highest at 276.
South Gate, California, has the lowest vacancy rate, 1.88 percent, which is 19.6 times lower than in Miami Beach, Florida, the city with the highest at 36.91 percent.
Akron, Ohio, has the lowest home price as a share of income, 190.14 percent, which is 7.8 times lower than in Berkeley, California, the city with the highest at 1,482.00 percent.
Q & A
Are foreign buyers driving up the cost of U.S. real estate? Which cities are most affected?
“Actually, foreign buying of US real estate is plunging — mostly due to the coronavirus pandemic,” said John Featherman, Temple University’s Real Estate Institute. “Many foreign buyers — especially from China and Canada — are holding off buying until they feel they can enjoy the properties. If Biden wins the presidential election, many Chinese buyers may feel more comfortable re-entering the US real estate market. “
“Generally, no,” said Norm Miller, Ph.D., University of San Diego. “The dollar has been weakening to the Euro so we are getting less expensive and a few wealthy buyers have purchased in the first tier markets like NYC and Seattle and San Fran that now seem cheaper, and some Chinese continue to buy and Canadians but not in the numbers we saw several years ago. These large markets which benefited from tech growth are now seeing the telecommuting trend allow their demand to dissipate and move further away, so these high priced markets have softened even with the low mortgage rates at least in their central core areas. Foreign buying here has almost always been primary first-tier cities and that will continue but not at the pace we saw several years ago.”
“Foreign investment has had a huge impact on pricing in the few years in primary markets with a reduced impact in secondary cities,” said David Chapman, Ph.D., University of Central Oklahoma. “When the pandemic started we thought foreign investors would flock to the U.S. with a thought that the U.S. would handle the situation better than most foreign markets. Turns out the U.S. has had worse outcomes when dealing with the pandemic and the influx of expected investment appears to be on the sidelines watching. When it does come it might be looking at the secondary markets where the effects of the pandemic were less severe.”
In evaluating the healthiest housing markets, what are the top five indicators?
“The top 5 indicators I use when evaluating the healthiest housing markets are much different than most economic and financial experts,” said David Florenza, B.S., M.B.A., Villanova University. “Since I have worked for decades in over 12 different municipalities and teach courses in Public Sector and Urban Economics, I look for a community that is safe (low crime), streets are plowed during snowstorms on time, my trash is picked up on time, relatively low taxes, and good infrastructure for water and sanitary sewers. I told you my indicators were different, but they are important.
- The balance between income and housing price (or rent), i.e., affordability.
- The monthly cost equivalency between renting and owning.
- A healthy vacancy rate.
- Housing production that keeps up with demand at every level of income.
- Good public infrastructure and services. Schools, parks, safety, transportation, etc. said Joan Ling, University of California, Los Angeles.
“I think COVID 19 and the rioting has upended many of the housing markets,” said James Refalo, Ph.D., California State University, Los Angeles. “There will be a structural shift to the suburbs. I don’t know what the top five indicators are, but I think safety, the ability to avoid close contact with others due to COVID, and access to quality medical services, are probably significant on anyone’s list.”