Low unemployment, historically low interest rates, and strong job growth all fueled rising home prices, breaking previous price records, and drove up competition for homebuyers.
The Golden State's median home price hit $529,000, surpassing the 2005-2006 peak of $500,000, before adjusting for inflation. With inflation, 2017 home prices in California were $11,000 short of the record, the Los Angeles Times reports. Rising prices and tight inventory means competition for purchasing homes also increased. In San Diego, homes sold within an average of 31 days.
Home prices rose as the number of homes for sale continued to drop — even more so than previous years. Meanwhile, the number sales stayed about the same. "If you look back at 2017, it was a robust year," said Mark Goldman, finance and real estate lecturer at San Diego State University. "Interest rates were quite good, the economy was continuing to barrel ahead, wages were strong, employment was strong and millennials were aging into the homebuying market."
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