7 Biggest Keys to Understanding the California Real Estate Market
California is a unique place. Its incredible resources and beauty have always drawn people. The variety of ecosystems and landscapes made it the perfect place for Hollywood to thrive. And today more than ever, it’s a vibrant, multicultural place that welcomes people from all over the world. The California real estate market is unique, too. Buying a home here is a different experience from buying one in any other part of the United States, but you can buy successfully when you know the keys to understanding the California real estate market.
7 Keys to Understanding the California Real Estate Market
To successfully navigate the California real estate market and find a home you really want, you need to be prepared for the sort of prices you will run into. When you understand the state of the market in terms of cost, you can better plan your strategy and find a home you love that really fits you and your family.
References for Comparison
As a general reference, know that the median price for houses in California is just under $300 per square foot. The national average is right around the $140, making California one of the most expensive places to buy real estate. Only Hawaii is more expensive, and there are far fewer people or homes for sale in the island state.
As you consider your budget, just remember there are reasons California’s prices are so high, and some of those reasons are the very ones you have for buying a home there in the first place!
In Florida, there are only seven cities in the entire state with median list prices of $1 million or more. In California, there are 49 such cities. California is home to five of the top 10 cities in the US with the most million-dollar homes available.
Standards for family homes in California are high. If you are looking for quality real estate and desirable neighborhoods that offer the size, comforts, quality, and location to amenities that you value, you’re likely to find what you’re looking for in California.
The price of housing in California is rising more quickly than in most places, and despite many dire predictions that housing prices were a bubble that would burst, the state’s continued expansion tells another story. The important take-away here is to realize that now may be the best time to move. If you are considering real estate in California, talk to a knowledgeable realtor now about your options so you don’t risk being priced out of the market a few years down the line.
Consistent, steady rises in home prices also means that you will be accruing equity when you buy property in California. You can anticipate that your investment will grow and you’ll be in a good position should you ever want to sell your home later.
To understand California’s real estate market, you need to understand a bit about its population. Age, income, migration patterns, and overall population growth all have a strong effect on the real estate market in any area.
In California, an aging baby boomer generation is poised to affect the real estate market in the near future. As boomers age, many become interested in selling their homes and moving into more accommodating retirement housing. This opens up quality houses, many of which have only seen one owner.
California has also seen an influx of millennials in recent years, drawn by tech jobs that thrive in the state. Millennials prioritize easy access to public transport hubs and quality of life community locations, such as health food stores, coffee shops, and parks. This demand by millennials has an effect across the state, which is seeing strong growth in these community locations. Wherever you are thinking of looking, it’s becoming easier to find the amenities you want right in your neighborhood.
Median Days on the Market
Understanding the California real estate market also involves knowing what’s considered a long time for a home to be on the market. The statewide average for homes to be on the market is 54 days, and in Los Angeles, the average house is on the market for less than two weeks.
In general, there are fewer homes on the market than there were a few years ago, and typically, each has multiple offers. This tends to drive up the median price. However, prices on a home do drop once it’s been on the market long enough without selling.
If you’re looking to get a good deal in a certain area, it could be worth it to look specifically for homes that have been on the market longer than others. However, do be wary. Sometimes homes don’t sell quickly because there’s something wrong with them that most buyers don’t want to be bothered to deal with.
Real estate in California, as in many places, tends to follow employment statistics. Where there are plenty of opportunities for employment, the real estate market flourishes and new housing is constantly being built. Where employers are closing their doors, the housing market tends to slow. Fewer people are interested in moving there, existing homes go up for sale (and for lower prices), and there isn’t much new construction.
Either of these scenarios can work to your advantage, depending on what you’re looking for.
If you are self-employed, remotely employed, or retired, you may be able to get a great deal on a nice property by looking in areas that jobseekers are avoiding.
Conversely, if you want to be near a particular location for work, consider how much you’re willing to pay for the convenience. If you need to be very close, you will likely have to pay more. If you’re able to put up with a slightly longer commute, you could find something much more desirable and comfortable at a lower price.
To find out where the housing market in any community within California will go next, it pays to look at infrastructure development and investment. Wherever you see new schools being built, highways being updated, or new public transport hubs going in, these are all signs that the community is growing. Development can make an area more attractive and also keep the tax base low.
You can find some development just by looking around, but if you’re not currently in the area or want to get a jump on everyone else, talk to a real estate professional or visit the road and building departments of local counties and find out what major projects are slated to begin in the next six months to a year.
If you look at the state level, you can find out if any state-owned roads are going to be developed, which can give you a good idea of where the most desirable property locations are going to be in the near future.
Contact Teresa Mack
The biggest key to understanding the California real estate market is to have a California real estate professional on your side. Teresa Mack has her finger on the pulse of California’s real estate and is LA’s luxury urban living specialist. Contact Teresa Mack today and talk with a professional about the state of the market and your best move to get the home of your dreams.