How Real Estate Agents Feel About the California Housing Market
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If you are considering a career in California real estate and have been reading the latest headlines, you might not be sure what to think.
We don’t want you to make an uninformed decision one way or the other, so in this article, we’ll give you an overview of the current and near-future California housing market and — just as importantly — let you know what active California real estate agents have to say about how they’re feeling these days.
California Housing Market: Today
Here’s a quick snapshot of the present California housing market:
Home sales activity remains low. A steady decline in home sales continues (nine months running), but the rate of decline seems to be slowing. Most point to high mortgage rates and low inventory as the primary culprits.
Median home price holding close to $800,000. While June of this year enjoyed a mild .03 percent bump over the prior month, it still represents a 2.4 percent decline year-over-year.
Housing supply remains tight. Even with a slight uptick in inventory in the past month, the year-over-year numbers reflect an 8.3 percent drop in unsold inventory. With no immediate relief on the high mortgage rate front, the current inventory situation is not expected to change significantly.
California Housing Market: Tomorrow
The April forecast for the remainder of 2023 from the California Association of Realtors (C.A.R.) suggests that we’ll continue to see a decline in home sale activity and that the median home price should decrease as well. Even so, those prices will still remain relatively high, coming in at around $776,600.
Factors contributing to this outlook:
High mortgage rates
Low inventory
Reluctant sellers and buyers
All three of these factors are interrelated, of course. High mortgage rates mean buyers get less for their money, so affordability becomes an issue. And sellers, sitting in homes with existing mortgages in the 2 to 3 percent range, aren’t in a hurry to sell only to buy another place with a mortgage rate nearly double what they’re presently paying. In this environment, it usually takes some significant life change to motivate sellers to put their homes on the market.
Hope Spring Eternal
Nevertheless, many voices in the industry believe that California’s housing market remains healthy, even if in a period of transition from a seller’s market to one that is basically neutral. C.A.R. President Jennifer Branchini echoes that sentiment, saying, “California’s housing market has improved since the winter and appears to have found its footing as sales declined at the slowest pace in over a year.”
What California Real Estate Agents Are Saying
So, how do those with “boots on the ground” feel about the current California housing market? To find out, we conducted a survey of active California real estate agents.
Here’s what we learned:
When asked about the current real estate market, 86% of agents felt it was about the same as the last few years or getting better. Only 14% felt the market was getting worse.
And even while facing the challenges of today’s market, 86% of agents report that they are either satisfied or very satisfied with their careers in real estate.
When asked if they agree or disagree with the following statements, here’s what these California real estate agents told us:
98% agree they can still create opportunities to make money in a declining market
83% are confident that the market will improve within the next 6 months
88% believe that, overall, real estate is still a promising career path
88% believe that pursuing a career in real estate was the correct choice for them
Responding to questions regarding how to operate their businesses in the current California housing market, our real estate agents were nearly unanimous in their thoughts, saying that it is important for them to:
100 % agree that agents should stay informed and be able to communicate effectively with clients about the impact of interest rates
88% say agents should provide creative financing options to clients in order to help them overcome the challenges posed by volatile interest rates
85% think agents should be proactive in seeking out new leads and clients to maintain a healthy business
91% say agents need to have knowledge of market fluctuations in order to navigate the current real estate landscape successfully
87% agree that agents should identify emerging trends in order to successfully navigate the current real estate market
Our takeaway from this survey is that these real estate agents are not blind to the challenges presented by the current California housing market, but most are optimistic that they have the tools to respond to current conditions and continue to grow their businesses.
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Why It's a Great Time to Get Your California Real Estate License
Despite the challenges of the California housing market, now is an excellent time to start a career in real estate. From seasoned professionals to newcomers, the sentiment is positive and full of promise.
Challenges Bring Opportunity
While it's true that we're seeing a slower housing market, and the trend indicates it may remain that way for a bit, this doesn't mean that opportunities are drying up. On the contrary, a slower market often opens different doors for you.
When there are fewer properties on the market, sellers tend to lean more on expert advice, meaning that the skills and knowledge of seasoned real estate experts become highly sought after. Rather than see this as a blocker to your business, as a new agent, you can seize the opportunity to shadow an experienced agent in your brokerage, learning and adopting your mentor’s negotiation and marketing tactics as your own. Then, when the market eventually bounces back — and it always does — you will be well-positioned to thrive.
Community Commitment
In a slower market, local knowledge takes on more importance than ever. Buyers and sellers are looking for agents who can demonstrate more than just a general understanding of real estate — they want someone who knows the local scene inside and out. Consequently, this market environment demands real estate agents who immerse themselves in their communities and become neighborhood experts in the process.
During your downtime, you can volunteer in your community and build relationships (your network) that may organically produce leads for you at a time when they are harder to come by. Your level of commitment will resonate with active members of the community who will be grateful for your efforts and will feel prompted to reciprocate — a good thing for a budding agent looking to specialize in a particular locale.
Building for the Future
Real estate rarely takes a straightforward path, and those who manage to pivot, adapt, and learn are the ones who will outlast any market conditions. Now’s a great time to gain experience in a challenging environment and build a foundation of skills that will serve you well throughout your career.
Your Opportunity
Most active California real estate agents are confident in their ability to navigate this market and still see the tremendous opportunities it provides. This buoyant sentiment, along with the promise of steady market recovery in the future, makes it an attractive time to dive into a career in real estate.
The thing to remember is that, regardless of what the market may look like at any given moment, California is and will continue to be a housing market of high value. And while the market may fluctuate, the demand for qualified, dedicated real estate professionals stays constant.