In the second quarter of this year, the California real estate market experienced a major slowdown. However, it is not all bad news for homebuyers in the Golden State. In fact, many factors have lead to a strong Santa Monica-based real estate market that has been continuing to grow for several years now. So what’s the big deal about the current slowdown? Here are ten top trends for this market that will help you get ahead sooner rather than later:
Los Angeles Real Estate Market Is Steady But Still Not Record-Breaking
The most notable trend in the realease market for the second quarter of this year was the slow growth in the Los Angeles real estate market. Despite a record $8.7 billion dollar auction in May, the real estate market in the city remains relatively stable at around $6.9 billion. Significant challenges, such as a saturated market and a lack of new construction, remain challenges that have hampered the growth of the real estate market in the city for the past several years. However, most of these issues can be resolved with a little bit of effort. With the completion of the Westlake / Hollywood Freeway, the downtown Los Angeles area has seen a dramatic increase in traffic and businesses. The increased demand for services has also led to a major increase in hotel accommodations, with the hospitality industry seeing strong demand for both long-term stays and short-term rentals. The number of reported stolen items also increased in the second quarter of this year, but is still below the peak of the inventory in 2006. This is the largest volume of stolen items in a single year, and is likely part of the overall slowing of the real estate market.
California Real Estate Market Still Has a Long Way to Go
Real estate in California’s Central Valley has been experiencing a major lull in the second quarter of this year. This general slowing trend is likely the result of a combination of factors, such as weather and economic uncertainty, which have sapped investor appetite for the region. However, the recent failure of a series of high-profile real estate ventures, like the Great Lakes Real Estate Investment Trust (GLREIT), as well as a decline in the state’s corporate income tax rate, all served as warning signs that the state’s real estate market is in for a long spell of slow growth. The state’s real estate market is still relatively Jurisdiction-Shattered, with many areas experiencing collective levels of uncertainty, uncertainty about the future, and a lack of clarity as to how and when future generations will regard the status of the present generation’s home.
Jump Into the Santa Monica City Market
With a housing market that has seen strong price growth and a strong appreciation for the quality of its real estate, it only makes sense that the Santa Monica City Planning Commission would be excited about the opportunity to host the country’s largest homebuyers’ fair. Unfortunately, due to a management dispute, the fair has been delayed several times, with the lastest being in May of this year. However, the market has shown no signs of slowing down and the Commission has already issued a clear statement that it is “looking forward to seeing homebuyers, sellers and other significant stakeholders together in Santa Monica’s downtown area” in 2019.
The Rise of Waivers
In a major trend in the real estate market, a large number of homebuyers are now using certain types of vacation rental properties as their primary residence. These types of rentals, which generally come with non-disclosure and non-compete clauses, allow homebuyers to legally operate as independent businesses without having to go through the normal process of acquiring a mortgage and/or building a custom home. While homebuyers and homerenovators may not have the luxury of being able to purchase rental properties in Las Vegas or Palm Springs, the number of luxury accessory units being offered as part of vacation rental properties is growing at a stunning pace. In fact, a report from the research firm JLL Research shows that luxury vacation rentals will account for 26 percent of all types of vacation rentals this year, with 2017 being the top year of growth.
Consistent and Effective Pricing for Inventory and Equipment
It is often said that scale matters, but that is not always the case. In the real estate market, consistency and effective pricing for equipment and inventory often remain the best ways to go. This is especially true for mid- and long-term lease inventory. In 2017, the property market experienced record levels of renovations, with over 1 million square feet of new construction being completed around the country. In many cases, this renovation work was done on a very consistent schedule, with a new house being completed almost every other day for the next few months. This was especially important for people who are building a long-term home, as it made it much easier to pick and choose between several different designs.
Homebuyers are Stimulated by Stronger Inventory Levels
As noted above, the state of California has been experiencing a period of great caution in the real estate market. This has led to an overall higher inventory level than normal, but also means that homebuyers are being offered a great deal more for their money. In the second quarter of this year, the inventory grew by 6.6 percent, which is a significant increase over the 3.6 percent increase experienced in the first quarter of this year. However, this inventory is not the same inventory that was used to sell homes, but one that has been recently refurbished, installed, and refurbished. There is plenty of inventory to be had, and many companies are reaping the rewards of this increased inventory.
There is Plenty of Housing in the City
The second trend in the real estate market for the second quarter of this year was the increase in the number of housing units being built. This trend is likely the result of the resort-style developments being sprouted throughout the city, as well as the presence of the Googleplex, which will likely drive much of the construction progress in the area. The trend is likely to continue, as there are plans to build several towers and co-ops in the near future.
The Bottom Line
The California real estate market remains one of the most exciting and dynamic in the country. The inventory is still relatively low, and homebuyers are still being offered a great deal of opportunity. In a slowing market, you should be able to find bargains at every stage of the marketing process, from home inspection and appraisals to home purchase. Make sure you know where you stand in this growing real estate market and what you can do to compete.