From 2015 to 2016, our market improved greatly. Here are some numbers to supplement that.
How did our southern California real estate market do in 2016? I pulled the year-end data and compared it to how the market did in 2015, and the news is good.
According to the U.S. Bureau of Labor Statistics, the 2016 inflation rate was around 1.8%. In our market, the median home price increased by 3.6% from $564,000 in 2015 to $585,000 in 2016. In other words, we doubled the inflation rate. The number of homes sold only increased by 0.5% from 2015 to 2016, but the average number of days needed to sell a home decreased by three days. In 2015, it took 61 days. In 2016, it took 58 days.
For a more in-depth look at our local market activity over the past year, I pulled the numbers from three separate regions and did the same comparison with the previous year.
Alhambra: The median home price increased by 2.25% from $550,000 in 2015 to $562,000 in 2016. The number of homes sold decreased by 6% from 405 in 2015 to 370 in 2016. The average days on market increased from 53 days in 2015 to 57 days in 2016. This increase in the number of days needed to sell a home can be partially explained by the fact that Alhambra is a more mature city, age-wise, with fewer new homes and less overall movement between them.
Chino Hills: The median home price increased by 3.6% from $606,000 in 2015 to $628,000 in 2016. The number of homes sold increased by 3% from 884 in 2015 to 908 in 2016. The average days on market decreased from 69 days in 2015 to 60 days in 2016.
Rancho Cucamonga: The median home price increased by 4% from $467,000 in 2015 to $486,000 in 2016. The number of homes sold increased by 9% from 1,791 in 2015 to 1,807 in 2016. The average days on market decreased from 64 days in 2015 to 58 days in 2016.
As you can see, our market improved in 2016, and a 3.6% overall appreciation rate is fantastic. Keep in mind that you have a one-to-five leverage ratio for your down payment on the average home that you purchase. Paying 20% down to control 100% of the value constitutes a one-to-five leverage ratio. A 3.6% appreciation rate multiplied by five equals 18%. Therefore, your down payment has increased by 18%
If you have any questions about our market, please feel free to give me a call. I look forward to talking with you!