Reasons Why Real Estate Market in California So CompetitiveNovember 3rd, 2021 by Administrator
Every year, thousands of people looking to buy their dream home in the Golden State, California. And to make their dreams come true, they do a lot of savings and financial planning before start hunting for the perfect homes in the state as per their needs. But things are not as easy as it seems as the California housing market is surprisingly more competitive in 2021 than any other state in the USA. Properties that you had sorted last year are either already sold out or are costlier than a few months ago. All you have left with more expensive choices or wait for few more years for homeownership.
So, what’s making the real estate market in California so competitive? Only a professional real estate broker in the state can explain why is this happening and help you find a property within your budget. Until then, we will try to answer your question through this blog and let you understand what’s going on out there, and make things clearer a bit more for you.
More potential buyers due to lower interest rate
Of course, you are not the only one who is looking to buy a home in the Golden State. Especially, since the beginning of 2020, mortgage rates have been down as compared to previous years. This trend follows in 2021 too. It creates an opportunity for people to fulfill their dream of homeownership, even during the pandemic when the housing markets all over the world hit their lowest. Lower interest rates on home loans encourage property investors to make the most of the opportunities available for greater returns in the coming future.
The increasing trend of property investment
Real estate investment has seen tremendous growth in recent years. And in a state like California where housing prices are increasing with each passing year, property investment has become the most rewarding investment opportunity to diversify an investment portfolio and maximize the returns. Investors are showing a great interest in the pandemic-hit housing market through rental properties and resell properties at higher profit margins. Real estate investment, especially in rental property, creates a source of passive income for people who are planning for their retirement. As the returns in the California housing market are higher than any other state, investors are lined up to make their next purchase for greater returns. It makes things difficult for many people looking for a home in the golden state to compete against wealthier investors.
The housing shortage
There is always a housing shortage in California real estate market, and the COVID pandemic has worsened this situation. With the pandemic easing up with the nationwide vaccination, the competition in the housing market is fierce since the beginning of 2021, which led to a historic dip in the inventory. Many real estate brokers and experts are forecasting a slight decline in the pattern in the coming years to ease up the housing shortage in the market.
These are the top three reasons why the California housing market is so competitive. Investors are seeing an opportunity even in the pandemic-hit real estate market and making it difficult for many buyers.