The weather isn't the only thing heating up in Southern California. The lower half of The Golden State is seeing a continuous flare up in prices and demand in its real estate market. In fact, California reigns over Realtor.com's June 2016 list of hottest markets, with Vallejo taking the No.1 spot and San Francisco sliding in at No. 2. San Diego and Stockton also made it in the top five.
The ratings, based on inventory data and the site's user activity, reveal that SoCal isn't exactly a buyer's paradise. Houses are flying off the market 20-38 days faster than average in these locales, which means purchases are competitive.
While this hasn't changed much from the past - Realtor.com revealed that California's market has maintained relative consistency - it still is important for homeowners and buyers to keep these trends in mind. Check out the factors contributing to the heat in California's housing market:
Bidding wars abundant
Unlike slower, cooler housing markets, California's is a battlefield for heated bidding wars. With minimal inventory and plentiful buyers, it's a duel to the deal when potential homeowners find a home they want. As Equities explained, nationally, the overall trend of bidding wars is slowing down, as only 61 percent of home offers current receive multiple offers, down 2 percent from 2014's rate.
Nonetheless, bidding wars still significantly shape the real estate picture in The Golden State, and many homes are selling far above the asking price. This trend stretches from south to north - In San Francisco, 94 percent of homes receive multiple offers, and 81 percent of houses in Sacramento undergo the same routine.
There is so much to love about California living.
What's fueling the fire?
According to Equities, slow growth in the number of houses may be to blame for this phenomena. The question then becomes, how did this issue of supply and demand occur?
As the Los Angeles Times explained, the 2008 recession brought down both housing production and demand - folks lost their jobs and couldn't afford to upgrade their homes. As the economy sparked back up, so did job opportunities, giving families greater financial security. The number of people who had the means to pay for a brand new abode grew faster than houses could be built. Now, people are fighting to stay in Southern California, even if it means paying over the asking price.
It's no wonder the demand is so high considering the incredible lifestyle SoCal has to offer. Just consider some of the major cities in this locale: San Diego, Los Angeles and Santa Barbara, to name a few. Homeowners on the West Coast have quick access to the beach. At the same time, California's plentiful sunny days means families can create an oasis right in their own backyards. They can kick back on their custom patios and look out at the abundance of nature - a truly relaxing environment. Really, it's clear why Californians enter bidding wars!