Every real estate investor in the US knows that California's housing market is one of the hardest to enter into. However, California is also considered to be one of the best states to invest in real estate in 2020 for both long-term and short-term rental investment. The Golden State real estate market has given wealth to investors for many years, and it still has great investment opportunities to come in 2020. All you need to do is know where to find them. To help you out we've built this list of the best places to invest in California in 2020 based on Mashvisor Real Estate Analytics and Market Research. To find out why and where to invest in California Revenue Property this year, read on!
It is a must for any investor looking for success in investing in real estate, analyzing and examining existing trends and future projections of its target housing market. You should make sure that buying a rental property is a sound investment decision that will give you a good ROI before you even start looking for a home for sale on that market. Below is a snapshot of how the California real estate market is doing right now, before we go to our list of the best places to buy rental properties in California in 2020.
This is another reason to invest in real estate in California. According to the California Association of Realtors, low mortgage interest rates will help California's housing market by 2020. Mortgage interest rates are projected to stay close to 3-year lows, giving California real estate buyers the incentive and buying power they need to reach the housing market in 2020. C.A.R. estimated that the average 30-year fixed mortgage interest rate will fall to 3.7% in 2020, down from 3.9% in 2019 and 4.5% in 2018, and will stay low by historical standards. Not only that, but mortgage payments have started to decline and are now at their lowest in 34 months. So if you're thinking about funding your California mortgage rental house, it's a good time to take out a mortgage loan to invest in real estate.
Despite high property prices, California is still one of the best states to invest in real estate in 2020 because it is backed by a strong economy – the strongest in the world, in reality. California still provides and offers a variety of work opportunities, which inevitably contribute to employment growth. According to the California Housing Market 2020 outlook, unemployment in California is at its lowest point in 50 years! This is also projected to impact the state's population as more young professionals migrate to California to get better jobs. As the economy continues to grow, so does the demand for housing in many of California's best cities.
It doesn't come as a surprise to see that California house prices are still rising. According to the 2020 California Housing Market Forecast released by the California Association of Realtors, the average prices of homes for sale in the Golden State were at an all-time high in August 2019. As of now, Mashvisor's real estate data and analytics show that the average home price in the California real estate market is $718,718 ($384 price per square foot). We may attribute the rise in California home prices to a tight inventory and rising demand for housing.
When there are many potential buyers on the market, but there are not enough homes for sale, this inevitably creates some fierce competition, which leads to a rise in house prices. As a result, when prices increase, this widens the affordability gap for first-time buyers and weakens home sales. This is another California housing market pattern stated by C.A.R. in its forecast, noting that household purchases across the state have decreased marginally but remain above 400K.
When thinking about investing in California real estate, many first think about investing in conventional long-term rentals. Because most first-time buyers can't afford to buy a house, they prefer to live in home rentals, which is why it makes sense to adopt this rental strategy to make money on the California housing market. If you're also looking to purchase a conventional investment home, here are the five best places to invest in real estate in California by 2020 according to Mashvisor:
Lake Los Angeles
Sexton Group Real Estate Property Management in Berkeley, California is a boutique real estate company specializing in residential sales as well as property management services for properties throughout the San Francisco Bay Area. We have 3 offices to serve you, one in the heart of picturesque Berkeley, one near downtown Oakland and the third in the heart of historic Lafayette, California. The Sexton Group encompasses the essence of Berkeley’s charm and Lafayette’s family-oriented vibe all with a relaxed, down-to-earth nature. We are an amazing group of agents whose wealth of experience spans more than 25 years in the industry. Looking to sell a home in Contra Costa or Alameda County? Contact us today for your free consultation!