Tips To Succeed In California’s Difficult Housing Market
Navigating through the real estate market in California may be more difficult than ever before. In fact, the state’s market has become so complex that even the national publication Forbes took notice. The investment magazine recently published a piece discussing California’s market, providing some background to help those who chose to move forward with real estate transactions have a better understanding of these difficulties. Two of the key reasons discussed in the piece are:
- Inventory. California coast line property isn’t just beautiful, it is very limited. Land is scarce in desirable areas around the coast, making finding the right piece of property for a reasonable price in this area of the country particularly difficult. Inventory was further reduced by the number of homes purchased as foreclosures during the mortgage crisis and converted into rental properties.
- Legalities. The state’s history has also likely played a role in the lack of inventory in the current housing market. Specifically, the impact of Prop 13 should be considered. This initiative was passed in 1978 and effectively capped property taxes at 1.25 percent. In addition, the prop also froze “assessed property values at the original purchase price.” Some argue this leads many homeowners to avoid selling whenever possible.
Savvy buyers can use this information to their advantage, acting quickly and wisely when the right home becomes available.
You found the perfect piece of California real estate, now what?
Even though the market is difficult, properties that are put on the market often move quickly in California. DataQuick, a San Diego-based real estate data company, estimated that there were 37,734 homes and condos sold across California in May of 2014. The company also notes that prices are up almost a full percent from the previous month and 13.5 percent from the previous year.
To help ensure you get the home of your dreams once you find it, the California Housing Finance Agency recommends getting pre-qualified for a loan before you even begin your house hunt. Once that perfect home is found, it is often wise to bring in an experienced real estate attorney. Real estate agents generally use standardized forms that could offer inadequate protection. An attorney can help better protect your interests, drafting documents that are tailor made for your specific transaction. Common areas of concern include carefully structured provisions covering the buyer’s purchase being contingent to receiving financing and a full review and discussion of any potential title, easement or restriction issues.