The real estate market is a strange one. Sometimes, it’s hot and sometimes not. Understanding the market makes it easier to know when to sell when to invest, among many other things, and each state is different. The following is a quick rundown of the real estate market in California.
One thing that seems to be happening in California is the housing inventory is growing. The trend is hitting virtually every area of the state, from San Diego to the Bay Area and beyond. The growth has been significant, much more than it has grown in some time. In addition, most of these properties are high-end homes valued in the low millions. If the trend continues, there’ll be more homes for sale in California in a short while, but they’ll be unaffordable for the vast majority of aspiring homeowners.
Prices are Rising
At the moment, the prices in California continue to rise. This is a trend that doesn’t seem to be slowing down. Some areas are a little more expensive than others, but there are thousands of houses for sale in California with prices ranging from mid-six to upper-eight figures. There’s no telling if those numbers will stay like that or if they’re going to change in the future. Some think real estate prices will continue to grow as they’ve been doing for a long time, but others believe the inventory growth is something to worry about. More houses could mean prices could stop rising, maybe even drop. It’s essential to keep a close eye on what happens next.
There is a small trend creeping up, and it has to do with consumer demand. The trend is small, and it hasn’t changed prices at all; as mentioned earlier, housing prices seem to keep going up. Still, this low consumer demand is troubling. There are a lot of reasons why demand could be a little sluggish. The most apparent reason could simply be the fact that the world just went through a pandemic. As things start to turn in a better direction, this trend might reverse and go back to normal. There’s no way of knowing what might happen in the future, but it’s important to keep an eye on a trend like this one.
Another trend is large institutional investors are making the housing real estate market more competitive. These folks seem to be concentrating in states like California though there are other states, such as New York. It’s easy to think that the real estate market is so competitive because many folks want to buy a house, but that’s not always the case. As more of these large investors get involved in the market, it will make things harder for regular Americans to purchase a home in places like California. Some of these investors aren’t even intending on selling their investments but renting them out instead. This is a troubling trend, so it’s something to pay attention to.
California’s population seems to be shrinking. It’s the lowest it’s been in a long time, and the high price of homes in the state could be the reason. The other reason is simply that the pandemic made remote work easy, which means people were no longer forced to stay near their jobs. A lot of people saw this as an opportunity to move to states that are much more affordable. Some Californians decided to leave, and this could be one reason demand is getting a little sluggish. People who pay attention to trends say this is not a real issue. There are still people who are dreaming of moving to California, and they’ll start coming soon.
Some of these trends look great for California, while others are a little troubling. That’s how things are when it comes to the housing market in the state and why it’s not always easy to figure out what might come next.