California’s property paradox

February 19, 2021

The lure of the gold rush, oil, Hollywood, Silicon Valley, sun-drenched beaches, and lush vineyards has contributed to a Californian population in 2021 of around 39.8 million. That’s nearly the population of Spain.

The average house price in the state is now over $700,000 as even though the pandemic slowed growth slightly in 2020, low-interest rates and an historic housing shortage have pushed listings up.

On the face of it, now is a good time to put in an offer as interest rates are low and it is not unusual to see multiple offers if the valuation is accurate. At the same time, now is a good time to sell for the same reasons.

All well and good if your financial situation has remained stable throughout the pandemic although even without the power of seeing into the future, it is clear that balance must be restored in the SoCal universe.

As more and more millennials are given the opportunity to work remotely, we are seeing a shift away from densely populated cities especially the Bay Area and Los Angeles.

The paradox is that given a desire to relocate to areas such as the Central Coast, property prices are set to increase dramatically unless local authorities can create a balance in affordability. This requires the approval of new projects and fear of devaluation in existing neighborhoods often makes this a long, drawn-out process. In the long term, however, this will be how the Californian property market continues to survive and thrive.

This has truly been a winter of discontent notwithstanding a severe cold spell across the country and Southern California is certainly a desirable destination for many. Each area has its own unique attributes, and we all need to make smart decisions. The easiest route is to speak to a local Realtor?.