Many Americans have dreamed up packing up all of their belongings and moving to the Golden State. Whether it’s for entertainment, tech, or weather, California continues to capture the imaginations of homeowners and real estate investors.
However, the luster that surrounds California seems to have been dimming recently. The State is currently going through a major housing shortage and unprecedented wildfires.
Many Californians are struggling to remain in their own communities due to rising costs of living. If you are interested in investing in California real estate or you are interested in buying a home, then you need to learn about all of the relevant news and trends.
Luckily for you, we have you covered. So keep on reading and we will take you through everything you will want to know!
A Lot of People in California Were Already Being Priced Out
California recently lost a congressional seat because of its declining population. And the proliferation of wealthy tech companies has led to increased housing prices.
Before the pandemic, California was mainly seen as a state with a thriving economy. In fact, if California were its own country, it would have the fifth-largest economy in the world.
Sadly, the coronavirus has dealt a major blow to the economy of California. During the height of the pandemic, California had one of the highest rates of unemployment.
While wealthy tech employees can afford to pay hundreds of thousands or millions of dollars for homes in Silicon Valley, many others cannot. And a lot of people are realizing that they can pay much less to live in growing tech cities like Miami, Nashville, and Austin.
NIMBY stands for “not in my backyard.” Homeowners who have NIMBY attitudes fight against the building of new housing in their communities. While a lot of residents see the benefits of building more homes, they don’t want those homes built in their own communities.
These people working that more dense housing, such as townhouses, condos, apartments, and smaller houses could lead to lower property values. These people also worry that it would burden the existing infrastructure, like local services and schools, and lead to traffic problems.
Even local regulations with the best of intentions can drive up building costs and lead to delays that can stretch over years.
California Could See Winning and Losing Real Estate Markets
Some housing markets in the state of California might continue to slow down. However, others are likely to accelerate.
California is a very big state. So it makes sense that it can hold both winners and losers. The housing markets in the urban areas are struggling and will probably continue to do so until the pandemic is over.
In the San Francisco Bay Area, condo sales in the center of the city have dropped while homes in the suburbs are selling quickly. This is mostly because white-collar workers who are wealthy are working more from home. They don’t need to go into an office located downtown anymore.
Sonoma, Napa, and Marin County are seeing people sell their small homes in expensive cities and moving to affordable inland neighborhoods. Some people are leaving the state completely and moving to cities with stronger job markets.
With that said, plenty of Californians aren’t going anywhere. Residents of Southern California, especially in San Diego and Los Angeles, are doing a lot better than people in Northern California. Southern California is not as expensive and there is less remote going on over there too.
We don’t want to paint a picture that there is some mass exodus going on. These are all slight shifts in degrees. However, slight shifts can still be significant and affect property values greatly.
Home Sales in the Coming Years
For both buyers and sellers, the forward trend in California home sales is mixed. Potential homebuyers are able to make their dollars stretch thanks to low interest rates.
Baby Boomers who are starting to retire will lead to a lot of home sales. The generation below them is going to add to the sales volume as they look for better-paying jobs. Many people in that generation will stop renting and will start owning.
After the job market rebounds from the recession that was brought on by the pandemic, the future of California real estate starts to look a lot brighter. Investors will start to come in and many people will start to buy homes again.
Labor force participation and employment peaked in 2019. It took a decade for employment to finally come back after the Great Recession. And many of those gains were wiped away in a matter of months because of the coronavirus pandemic.
We can now expect home sales volume to decline along with jobs through the next couple of years. But a sharp and positive reversal will likely follow once things cool off enough.
Because the California real estate market is constantly shifting, you need to make sure that you are informed by the experts. That’s why you should work with a company like Max Benjamin Partners if you want to get involved in California real estate.
The Importance of Knowing About California Real Estate News and Trends
Hopefully, after reading the above article, you now have a better idea of what is going on with California real estate news and trends. This information will help you make more educated decisions when it comes to buying your next property.
If you are looking for other helpful articles, then make sure to check out the rest of our site today for more!