Without question, real estate remains one of the most popular investments in the United States, but those who grow truly wealthy from their transactions do so because they stay apprised of the most recent trends and opportunities in the world of real estate. This is especially true in California, which is the most expensive place to live in the 48 contiguous states and where the average home costs well over $1 million.
So how does one best navigate the California real estate market in search of great investment opportunities, especially for those in search of rental properties that can bring in a steady income for years? Knowing these trends and opportunities for the 2019 calendar year is a great place to start:
#1 The Economy is Good
The most important trend to consider moving into the new year is the economy, and currently, the economy is doing quite well. That’s a good thing for real estate because it means higher-paying jobs, new career opportunities, and (for some people) lower taxes. Typically, when these types of things happen in concert, it means good things for the real estate market, and another strong year in 2019 would solidify that.
#2 Millennials Continue to Drive the Market
As the Millennial generation ages, they are looking to transition from renting to purchasing. Now that an increasing number of this essential demographic group is looking to buy homes, we also can see increased demand for real estate in the state of California.
#3 Mortgage Rates Continue to Climb
Mortgage rates rose in 2018, and that does not look likely to change in the year to come. In fact, average rates could exceed 5 percent by the end of 2019. This is the type of thing that actually discourages mortgages, so those looking to invest a real estate could be wiser to do so closer to sooner than later. Interest rates are only going to go up in the months ahead, seriously affecting our California real estate predictions.
#4 Home Prices Will Continue to Rise
Across the U.S. in 2018, the average home value rose by 8.1 percent, in part because there was such a demand for new homes and in part because there was not enough inventory to satisfy that demand. As long as the shortage continues, it seems fairly likely that home prices will keep rising throughout 2019. Los Angeles and San Francisco, in particular, are notorious for their limited supply, which should keep prices high in the year to come.
#5 It’s a Seller’s Market
The strong economy, increased demand for homes, and rising interest rates and home prices probably mean 2019 will be another seller’s market, which gives sellers a great opportunity to make some great money should they decide now is the time to move onto other ventures.
That doesn’t mean buyers are out of luck, and should you decide to purchase real estate in 2019, remember to keep landlord insurance in mind, as it can get complicated at times, particularly where rental properties are concerned. If you need any help getting your insurance in order, give us a call here at Insurance by Castle any time, and we’ll be happy to help you get set up with your new real estate investments.
