California has a reputation for being one of the strongest real estate markets in the country over the last decade, and that trend continued in 2019. Due to housing demands outpacing home availability and a strong economy aided by the popular entertainment industry, California real estate remains one of the hottest markets in the country.
1. Rent Control Laws Are Now in Effect
As of January 1, 2019, California now has a statewide rent control law in effect. For the first time, the state has placed limits on rent hikes. Residential landlords are not permitted to raise rents more than 5 percent plus the local rate of inflation over a one-year period.
The rent control provisions apply to cities that did not already have rent control laws in place and expands rent control laws in places that already had laws on the books.
2. Home Values Were at Record Highs
According to Housingwire.com, California’s median home sale price was $605,280 in 2019. This was a jump of 6% compared to median home prices from a year earlier.
Since 2009, the California housing market, boosted largely by sales in the Los Angeles area, has been one of the top-performing real estate markets in the country when compared to other states.
3. It Has One of the Lowest Default Rates in the Nation
Not only has the California housing market outperformed others in the country, but it also boasts one of the lowest mortgage default rates in the United States, according to the Consumer Finance Protection Bureau.
Among both property buyers and real estate investors, California averaged a foreclosure rate of 1,4% as of December of 2019. This is compared to a national default rate average of 2.2% in the same period.
4. New Laws Encourage Housing Development
5. Lower Interest Rates Boosted Sales
6. California Passed More Fair Housing Laws
A Fair Housing Act that requires public agencies to administer programs that promote fair housing also passed in 2019. This requires public agencies to enact programs that further eliminate housing discrimination and patterns of segregation in communities as well as address housing disparities among certain groups.
7. California Real Estate Has Appreciated
8. Anti-Price Gouging Laws Are In Effect
In 2019, California enacted legislation that prohibits price gouging during emergencies. When a disaster is declared, landlords may not raise rents by more than 10 percent within 30 days of the declaration.
Rental properties that were not on the market when the emergency was declared are not affected. This means that rental property prices have not been raised at substantial rates during the current pandemic, for example.
9. The Real Estate Market Was Popular Worldwide
For the third year in a row, California was the top market for foreign capital investments in 2019, according to the Association for International Real Estate Investors (AFIRE). Because of market stability and potential revenue gains, real estate provides the best opportunity for capital appreciation. For these reasons, real estate in California continues to be in high demand by foreign investors.
10. RHNA Amendments Were Enacted
Amendments were enacted to the Regional Housing Needs Assessment (RHNA) requiring it to collect data that will more accurately reflect housing needs and job growth within the state.
11. Rentals Are Available
Homeownership rates in California averaged 54.8% in 2019. This means that a large percentage of the population rents rather than owns. Although the state’s rental vacancy rate of 4.2% of available properties for rent remains below the national average, there is plenty of rentals still available in California.
Apartments are not the only options for those looking to rent. Condos, townhouses, duplexes, or even single-family homes are often available for renters. An experienced real estate agent will know how to find you a rental property at a rate you can afford.
12. Single Family Homes Aren’t the Only Purchase Option
Many people dream of owning that single-family home surrounded by that white picket fence. But with housing prices well above the national average in California, that may not be a realistic choice for everyone. Fortunately, that is not your only option.
Condominiums, townhouses, or small-lot homes are also for sale and may be available at lower prices than a traditional single-family home. Multi-family dwellings such as duplexes and triplexes—which are ideal for extended families— are also available.
13. A Great Real Estate Agent Is a Must
Recognizing real estate trends and translating them into action is what Teresa Mack does best. Teresa has spent years studying the evolving real estate scene and understands the California market. Her extensive experience enables her to translates that knowledge into actions that give her clients a positive experience and nets them the best possible deal.
Teresa grew up in the View Park, CA area, and has an intimate knowledge of the California real estate market. She has the skills and expertise you need to walk you through the buying or selling process. If you are ready to explore the real estate market in California and all it has to offer, contact Teresa Mack and let her put her expertise to work for you.