5 Things You Need To Know About The 2021 Temecula, California Housing Market
If you are looking to either purchase or sell a home in Temecula in 2021 this blog post and video will give you some insight into where we think the market is going. No one can predict the housing market and its future but we do sell and appraise hundreds of homes in the area which gives us a first-hand look at the current market.
Interest Rates Stay Low
In our opinion, interest rates will stay at historic lows throughout 2021. Throughout the country, this is one of the major factors and driving home prices up. If you want to calculate specific home prices and interest rates, just google mortgage calculator, this will give you an easy simple way to calculate a monthly payment.
I will give one example here, if you borrow $500,000, at 3% your payment is almost $300 less per month than at 4%. Also, you will be paying almost $100,000 less over the life of the loan and interest. If this isn’t an incentive for many home buyers, I don’t know what is. As interest rates continue these record levels we will continue to see the rise in the housing industry, not only in Temecula but throughout the United States.
Supply will not rise as fast as demand
It is a common theme today, not enough inventory. I cannot speak for the rest of the country but it seems to ring true locally here in Temecula. Regardless of what you hear on the news about everybody leaving California, it’s just not the case in this area. California is a big state and yes I am sure there are areas of California that people are leaving in droves.
In regards to Temecula and its amazing weather, amenities, opportunity, home prices, and overall quality of life, people are wanting to live here, plain and simple. We have one new large housing tract called Somers Bend. Other than that? You’re going to be buying existing homes.
We have been selling real estate for years and new home communities were always & easy option, with some great incentives from the builder. This simply hasn’t been the case over the past few years. Incentives are becoming more scarce and depending on what phase your home is going to be built in, prices are rising dramatically.
A great example was this year. We were showing new home builds in Corona. They were scheduled to start on their home build at Phase 3. Both Phase 1 and 2 were sold out and phase 3 was expected to rise in price by $20,000 to $30,000. For the same house, 3 months later builders were able to get a substantially higher price.
Frustration for Buyers
I wanted to talk about frustration as a hole for buyers moving forward into Buying a home in Temecula in 2021. Some of the things that are going to carry over from 2020 and you need to be aware of are as follows.
- Be ready to over-bid on properties and release your appraisal contingency. What does this mean? If you put an offer on a home at $520,000 but it only appraises for 500,000, you, the buyer, are responsible for that $20,000. This will come straight out of your pocket in addition to your down payment and closing costs.
- It can become demoralizing, overbidding on properties on multiple occasions, and never getting something accepted. I always tell buyers over the years, it always seems to work out, just don’t give up and we promise you will find the perfect home.
- You need an aggressive realtor that’s not going to tell you what you want to hear but the truth. If you want an offer accepted you will have to give up some things that are common in a normal Market. Termite report clearance, home warranties, repairs are all things that buyers in many cases need to wave in today’s market. Sugarcoating things in this market is not going to help you get into a home. When you find an agent to represent you in this market they should pretty much come straight out and ask you, are you ready to go to war? Of course, we might be exaggerating a little bit but not really haha.
Pool Homes Will Still Be In High Demand
In regards to pool homes, we have our opinions of why pool homes have gone up in value but nobody can say for certain. Obviously, with the pandemic, people are staying home and want things to keep their kids busy. Because you’re spending more time at home you want activities especially when the weather is beautiful eight to nine months out of the year.
Having an in-house licensed appraiser is helpful when dealing with data and trying to figure home values and where they are going. In regards to cool specifically, historically they might get anywhere from 10 to $20,000 in regards to value on an existing home resale. when you compare these numbers over the past 5 to 6 months, they have changed dramatically. Now, pool homes are getting upwards of 40 to $60,000 for a regular run-of-the-mill track home. This is something that we have not seen.
Bottom line? If you want to pool home be ready to pay up, way above Market or list price, and release your appraisal contingency. I would say on average when we were bidding on pool homes in 2020 it was anywhere from 40 to $60,000 above list price on the MLS.
What if I am Selling??
If you plan on selling your home in Temecula in 2021 you will continue to be in the driver’s seat in our opinion. DO NOT let anybody tell you otherwise, you call the shots and you hold all the cards. Just be semi-realistic and you will get what you want. If you don’t, there will be three or four other buyers in line waiting.
The one thing I would do if I was selling or thinking of selling a home in Temecula in 2021 is to keep your eye on the market. If it goes anything like the last 5 months you could gain thousands of dollars, waiting two or three months. Having said that, the market can turn quickly and unlike selling shares in the stock market, it takes time to list the home, get through escrow etc.
Generally speaking, the market is going to go down a lot faster than it goes up, but the last five months have been the exception to this rule. If you would like to keep your eye on the market and have data straight from the local MLS analyzed monthly, make sure to subscribe to our YouTube channel, called ExploringTemecula. On the 1st of every month, we go over exactly what has happened in Riverside County housing market over the past 30 days. We go over just listed properties, days on market, average sales price and give you an in-depth review of exactly what has happened. Data is a beautiful thing, it doesn’t lie or pick sides, just paints a clear unbiased picture.
Thank you for reading our blog, if you have any interest in moving to Temecula or the surrounding area please read the Google Reviews here for Greenleaf Real Estate & Appraisal.
We are licensed as both Real Estate Brokers & a Certified Residential Appraiser. We love what we do and will bring a great deal of passion, experience and expertise to the table for you.
