Whittier & La Habra on spotlight: Just how safe are the two cities for investors? , by Briana Frazier.

By Briana Frazier

Whittier & La Habra on spotlight:

Just how safe are the two cities for investors

The number one question that people have been asking themselves this year is whether the housing market will crash. This is understandable as the Great Recession left a lingering bad taste in most people. The current price appreciation and the beating the economy took when the pandemic hit has also fed the overall anxiety that the housing market is in a price bubble. A bubble that may burst at any moment. It is okay to have these worries as investing in real estate is a big step. To know whether a market is safe, you will need to analyze different metrics within it. These include: the state of the economy, interest rates, the supply and demand dynamics. Now, how safe are the Whittier and La Habra housing markets?

INVENTORY

It is no news that inventory all across the country has been slim, and California has been no exception. There have been more and more homes entering the market, but they are not nearly enough. Whittier, for example, in June had 157 new listings, a drop from the 172 homes listed in May. The number of homes sold in June was 150, increasing from the 115 homes sold in May. On the other hand, according to Zerodown.com, the number of homes coming into the market in La Habra is even smaller than that of La Habra. In June, there were 80 new home listings, increasing from the 68 from the month before. More homes sold in June, though, with 55 homes sold, 3 more than those sold in May.

The numbers show that there aren’t still enough homes getting into the market. There may be an imbalance in the supply and demand dynamics, but it doesn’t signify a crashing market. For that to happen, the supply of homes must greatly outweigh the demand. The opposite is true for both Whittier and La Habra.

DEMAND.

Both the real estate market in La Habra and Whittier are very competitive. Houses on the market are spending fewer days listed. In the 12 weeks leading up to July, the median days on the market in La Habra have decreased by 53.7%, that is, a decrease from 27 days to 12.5%. In Whittier, the drop is not as significant as La Habra’s, with the 20% drop, a drop from 25 days to just 20 days. The disparity in days in the two cities may indicate that La Habra is more competitive than Whittier. But for both, the competition has seen people in La Habra and Whittier pay 5% and 4% over the listing price, respectively.

PRICES.

In June 2021, the housing Market in California saw prices appreciate by 30% year-over-year. In La Habra, these prices appreciated by 17.9%, and in Whittier up 20%. The median sale price, in Whittier, in June was $720k, up from $705K in May. In La Habra, the median price was in June $714K, increasing from $624,500 in May. The prices are likely to continue rising in the coming months as the demand is still high and the supply is still very low. Contrary to the great recession where prices dropped drastically.

However, even with the increase in home prices, home affordability is still there. Low mortgage rates are making debt financing accessible to many would-be homeowners. And as the economy continues to recover, there will be job growth, and people will be able to make their mortgage payments. Moreover, the current demand is still very strong and will not exhaust the current supply. It is, therefore, to say that the housing market for the two cities is healthy and will not crash.

Sources:

https://zerodown.com/explore/housing-market-analysis/california/greater-losangeles/los-angeles-county/whittier https://zerodown.com/explore/housing-market-analysis/california/greater-losangeles/orange-county/la-habra https://www.redfin.com/city/9975/CA/La-Habra/housing-market https://www.redfin.com/city/20869/CA/Whittier/housing-market