California Real Estate Facts and Statistics 2018-2019
If you are a real estate investor or simply someone who is interested in living off the grid, you should be aware of an important California real estate law that could affect your plans. In California, purchasing real estate without the attendant water rights to the land typically makes it illegal to connect sewer and water lines to the property. Most home buyers want to establish sewer and water hookups to their new purchase, so make sure you do your homework before completing any real estate transaction in the state. Real estate law can be tricky, but a little research can help make your purchase a satisfactory one. Source
California typically has one of the most robust real estate markets in the nation, and the state’s performance in 2018 should be no exception. When the final results are tallied, real estate experts are predicting that home sales in the Golden State will increase to approximately 428,000 units for the year. The total represents a gain of about 1 percent compared with the previous year. The value of single-family homes in California saw a healthy jump of approximately 8 percent to $582,000. Fairly low inventory played a role in the boost in home prices.
Home sales in California have undergone substantial swings in the past 14 years. In 2005, real estate sales volume reached a peak when more than 750,000 homes were sold in California. As the economy slowed in California and throughout the nation in the next several years, real estate sales volume slowed substantially in the Golden State. For example, sales volume fell 30 percent in 2006 before dropping another 30 percent in 2007. Real estate sales began to stabilize in 2011. Trends remained inconsistent for the next few years. After a 9 percent increase in 2015, sales volume trends were largely flat in 2016 and 2017.
Although the picture has improved in past couple of years for real estate investors and homeowners, more than 10 percent of the homes in California still had negative equity in 2016. Sometimes called being “upside down,” negative equity means the value of a property is below the outstanding amount of its mortgage. Real estate trends in Southern California are particularly extreme. Of all cities in California, Los Angeles has the highest percentage of renters at 52 percent. With a median home price exceeding $2.2 million, Newport Beach is the most expensive real estate market in the state.
According to real estate market experts, demand for California property reached an all-time high at the end of 2018. The market was especially strong in the coastal areas of Northern California and Southern California. For example, the cost of a median-priced home in Los Angeles now exceeds $600,000. In San Francisco, the average price per square foot is more than $1,030. In San Diego, the number of listings increased substantially throughout 2018. As investors compete to buy real estate in the hottest regions, bidding wars for the most desirable homes break out more frequently. It is becoming more common for potential buyers to make all-cash offers.
As declining inventory and increasing home prices hit the California real estate market in 2018, some real estate experts began predicting a price bubble in the state. For example, June 2018 was the most sluggish month of home sales in the Golden State since 2014. The total number of transactions dropped by nearly 10 percent compared with the previous year’s statistics. One factor in the slowdown was a change to the tax law that limits deductions for property taxes and loan interest. Rising interest rates, which can lead to larger mortgage payments, are beginning to discourage some potential homebuyers. Wage stagnation also played a role, according to industry experts.
Thanks in part to slowing demand, burgeoning traffic and rising home prices, experts are forecasting a challenging real estate market for California in 2019. According to real estate surveys, California consistently rates among the least affordable places in the United States for homebuyers. Based on wages and average home prices, only 25 percent of California residents can comfortably afford to buy a house in the state. Nationally, the rate exceeds 50 percent. The California Association of Realtors predicts that home prices in California will increase by about 3 percent in 2019. The total number of home sales in the state will fall slightly, according to the organization.
The first McDonald’s restaurant opened in 1940 in San Bernardino, California. The third McDonald’s restaurant, which is on Lakewood Boulevard in Downey, California, stands as the oldest operating McDonald’s location. Since its humble beginnings, the McDonald’s corporation has grown into one of the world’s most powerful commercial real estate forces. The company owns the land on which its restaurants sit, and franchisees typically pay rental fees to the parent corporation. In total, McDonald’s owns approximately $16 billion worth of commercial real estate.
With mortgage rates at their highest levels since 2011, prospective homebuyers in California could be more likely to exercise caution before taking a leap into the real estate market in 2019. Officials with the Federal Reserve have indicated they plan to continue raising interest rates in 2019, which could result in bigger monthly mortgage payments for typical homeowners. A drop in the number of active homebuyers could lead to a slowdown in the growth of real estate prices in California and throughout the nation. Residential construction in the United States has also stagnated after reaching a 10-year high in January 2018.