This article has been updated to reflect the latest trends in the Atlanta real estate market in 2021. Metro Atlanta housing market has experienced a smooth recovery by far. Despite unemployment and uncertainty, the greater Atlanta residential real estate market performed extremely well during 2020. Home prices were through the roof in 2020 and the pace of appreciation seems to continue in 2021. The median price of a home sold last month in the 11-county area was $372,500. This price is 3.5 percent more than the previous month and 26.3 percent higher than June 2020's median price, according to the Atlanta Realtors Association.

Record-low interest rates and are enticing buyers into the market and giving them more buying power. Even as home values continue to rise, low mortgage rates give buyers more buying power. It's not only low-interest rates pushing up prices to record highs. A lack of homes for sale is a big part of it too. 2021 will be defined by low-interest rates and low inventory, a perfect storm that will continue to push home prices higher. Overall, the Metro Atlanta housing market remains competitive, although not as fiercely so as it was a few months ago. A year ago, metro Atlanta's supply matched a historically low 1.8 months – and it has continued to decrease. By May 2021, inventories represented only one month of supply. However, in June, this increased to 1.3 months. That is still very low, but the shift in the housing supply trend was quite substantial.

How Did The Atlanta Real Estate Market Begin in 2021?

Despite the pandemic, January 2021 home sales were 4,421, a 1.0 percent rise over the previous year. Even as sales increase, the market is restricted by the continuous decline in available inventory, which was cut to 1.2 months supply in January. According to the Atlanta Realtors Association, the inventory of houses for sale in metro Atlanta decreased to 1.2 months. That was about 5 months shorter than what is considered a balanced real estate market.

The median home price in metro Atlanta hit $390,000 in January 2021, an increase of 17.9% from last year. These factors should continue to put upward pressure on sales prices over the next few months. The Atlanta housing market is expected to see one of the country's steepest rises in home prices next year, according to the 2021 housing forecast from Realtor.com. The forecast shows a growth of 6.7% in 2021, compared to a 5.7% increase nationally — putting metro Atlanta in the 20 markets expected to experience the huge home price increases.

Atlanta Housing Market Trends 2021 (Describes June)

Atlanta REALTORS® Association (ARA) released its June 2021 Market Trends on residential housing statistics for 11 area counties in metropolitan Atlanta. The Atlanta Realtors Association report covers Cherokee, Clayton, Cobb, DeKalb, Douglas, Forsyth, Fulton, Gwinnett, Fayette, Henry, and Paulding counties and is compiled by First Multiple Listing Service. Here are the key houisng statistics. 

Housing Demand: In June, residential sales were at 7,637, an increase of 2.0% from the previous year. The number of homes sold in June ranged from 1,027 in DeKalb County to 1,943 in Fulton County. Considering the impact of the pandemic and the continuation of work from home culture, there could be more home sales in suburban areas than in big cities.  

Home Prices:  High demand is met with low inventory and a constrained housing market, driving a sustained upward trend in Atlanta home prices. The result is that the average and median sales prices continue to gain traction and outpace 2020’s figures, with positive gains. The median sales price in June was $372,500, an increase of 26.3% from last June. The average sales price was $452,500, up 28.2% from the previous year.  Among Atlanta’s largest counties, median sales prices ranged from $350,000 in Gwinnett to $435,000 in Fulton. In June, metro Atlanta house prices continued to rise, but an increasing inventory may make it less of a seller's market in the coming months.

Housing Supply: The metro Atlanta housing market has been leaning in favor of sellers for several years, and the shortage of homes has been even more acute during this pandemic. Housing inventory in the Atlanta area totaled 8,739 units in June, a decrease of 40.1% from June 2020. New listings totaled 9,636, up 2.7% from June 2020 and up 12.9% from the previous month. The month’s supply over a 12-month period increased to 1.3 months, which means sellers still cannot meet buyer demand. Experts consider the market balanced when the number of listings is equal to about six months of sales. 

Listing Prices: Realtor.com's June 2021 report shows Atlanta is a seller's real estate market, which means that more people are looking to buy than there are homes available. Home prices have been surging largely because of limited supply and fierce competition for available homes. The median list price of homes in Atlanta, GA was $390K, trending up 14.7% year-over-year while the median sale price was $385,000.

The median listing price per square foot was $250. Sale-to-List Price Ratio: 100%, which means that Homes in Atlanta, GA sold for approximately the asking price on average in June. Ideally, a buyer would prefer a sale to list price ratio that’s closer to 90% while a seller would always prefer scenarios that can yield a ratio of 100% or higher.

There are 205 neighborhoods in and around Atlanta, GA where Realtor.com has listings. Lenox Park has a median listing price of $899K, making it the most expensive neighborhood. Sylvan Hills is the most affordable neighborhood, with a median listing price of $259.9K.

Days on Market: On average, homes in Atlanta, GA sell after 49 days on the market. The trend for median days on market in Atlanta, GA has gone up since last month, and slightly down since last year.

Rental Trends: About 50% of the households in Atlanta, GA are renter-occupied. Atlanta rent prices plunged during the most severe period of the coronavirus outbreak when much of the city’s economy was locked down. It is supposed to have ended eight years of steady rent growth in the Atlanta housing market. Average rents were down 2.2% from March through May for the entire metro Atlanta market. The declines were sharpest in areas of Buckhead, Lindbergh, and Emory, Midtown but the suburban markets did not suffer much.

But the latest market reports show a fast pace recovery from the effects of the pandemic. According to Realpage.com's analysis, there's been a record apartment demand in Atlanta. In fact, the whole Georgia market claimed the nation’s top spot for apartment demand. Atlanta’s 3rd quarter demand tally of 9,008 units accounted for 87% of the market’s annual absorption in the year-ending September.

The rent prices are up whether you compare them annually or monthly. As of August 2, 2021, the average rent for a 1-bedroom apartment in Atlanta, GA is currently $1,650. This is a 14% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Atlanta remained flat. The average rent for a 1-bedroom apartment increased by 5% to $1,650, and the average rent for a 2-bedroom apartment increased by 1% to $2,108.

• Two-bedroom apartments in Atlanta rent for $2,108 a month on average (a 12% increase from last year).
• Three-bedroom apartment rents average $2,250 (a 19% increase from last year).
• Four-bedroom apartment rents average $2,350 (a 12% increase from last year).

The Zumper Atlanta Metro Area Report analyzed active listings in June 2021 across 8 metro cities to show the most and least expensive cities and cities with the fastest-growing rents. The Georgia one-bedroom median rent was $1,108 last month. Atlanta was the most expensive city with one-bedrooms priced at $1,520 while Athens ranked as the most affordable city with one-bedrooms priced at $980.

The Fastest Growing Cities in The Atlanta Metro Area (Year-Over-Year) 

• Athens had the fastest-growing rent, up 15.3% since this time last year.
• Marietta saw rent climb 13.6%, making it the second-fastest-growing.
• Alpharetta was third with rent jumping 11.5%.

The Fastest Growing Cities in The Atlanta Metro Area (Month-Over-Month)

• Marietta had the largest monthly rental growth rate, up 3.5%.
• Smyrna was second with rent climbing2.4%.
• Atlanta saw rent increase 1.3% last month, making it third.

Atlanta Real Estate Market Forecast 2021-2022

Atlanta has been one of the hottest real estate markets in the country for years. It is also one of the hottest real estate markets for investing in rental properties. Population growth has had a positive impact on the housing market in Atlanta. Nearly 285,000 people moved to Georgia in 2019, according to the most recent data from the U.S. Census Bureau.

This migration has been made possible the state's consistent ‘best state for business' rankings. Area Development magazine named Georgia No. 1 for business – for seven straight years (2014-20). Nine out of 10 Fortune 500 companies have operations in Georgia – and 18 of these have made Georgia their world headquarters.

Much of this migration is driven by the strong business environment in Atlanta and the relative affordability of the city. Its robust knowledge-based economic ecosystem attracts new talent to the city. The net migration has led to an ever-increasing demand for housing in Atlanta which cannot be met with the current pace of the new construction.

The Atlanta housing market has a housing shortage which will continue to contribute to increasing prices. Atlanta home prices on average are less expensive than the national average. Despite being below the national average, Atlanta home prices have more than doubled since 2012, and are projected to continue increasing.

Let us look at the price trends recorded by Zillow over the past few years. Atlanta has a track record of being one of the best long-term real estate investments in the U.S. Since 2012, the Atlanta home values have appreciated by nearly 138% — Zillow Home Value Index. 

ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. The typical home value of homes in Atlanta is currently $333,760. It indicates that 50 percent of all housing stock in the area is worth more than $333,760 and 50 percent is worth less (adjusting for seasonal fluctuations). In August 2020, the typical value of homes in Atlanta was around $300,000. Atlanta home values have gone up 12.2% over the last twelve months.

NeighborhoodScout.com's data also shows that Atlanta real estate appreciated by nearly 83% over the last ten years. Its annual appreciation rate has been averaging at 6.23%. This figure puts it in the top 10% nationally for real estate appreciation. During the latest twelve months, the Atlanta appreciation rate was nearly 6.02%, and in the latest quarter, the appreciation rate was 1.96%. If it remains steady, it annualizes to a rate of 8.06%.

Here is Zillow's home price forecast for Atlanta, Fulton County, and Atlanta Metropolitan Area. The forecast is until April of 2022 and you can expect to see very strong home price gains in this region. It is going to be a strong seller's market that will be much more stable than the unpredictable trends experienced this year.

• Atlanta-Sandy Springs-Roswell Metro home values have gone up 17.4% over the past year and the latest forecast is that they will rise by 15.4% over the next twelve months.
• This figure corroborates with Realtor.com's forecast, which also predicts that home prices in this region are expected to increase by nearly 6.7% in the next twelve months.
• Atlanta home values have gone up 12.2% over the past year and will continue to rise at a similar pace in the next twelve months.
• Fulton County home values have gone up 13.5% over the past year and will continue to rise at a similar pace in the next twelve months.

Here is the visual representation of how home prices have grown from 2011 and their forecast (in the green area) until June 2022.

The change in home prices for Atlanta-Sandy Springs-Roswell, GA are shown below for three time periods by LittleBigHomes.com. The Atlanta Home Price Index has increased for the last 25 consecutive quarters (data up to 3rd Quarter, 2018). The highest annual change in the value of houses in the Atlanta Real Estate Market was 15% in the twelve months ended with the 1st Quarter of 1980.

Is Atlanta is going to remain a seller's real estate market in 2021?

These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? While many have lost jobs, making them ineligible for a home mortgage, some sellers have taken their homes off the market. The decrease in the number of active listings indicates that new sellers are still not willing to put their homes on the market until the pandemic or its threat is completely over.

At the same time, the industry is adapting to the current environment by conducting business using technologies such as virtual showings and e-signing to help buyers and sellers with their housing needs in the face of these challenges. While some economic activity will resume as the state gradually reopens, the housing market is expected to remain sluggish for the next couple of months until the economy opens up completely. Sellers, brokers, and homebuyers seem to be adjusting to restrictions imposed on the real estate industry because of the coronavirus pandemic.

The constraint on available inventory and a decline in new listings is keeping the Atlanta real estate market skewed to sellers. Atlanta and the entire metro area market is so hot that it cannot shift to a complete buyer’s real estate market, for the long term. The Atlanta real estate market benefits from a large and robust economy.

According to the data insights provided by the Bureau of Economic Analysis, the Atlanta metro area was the tenth-largest in the U.S. and among the top 20-largest in the world (as of 2020). The housing demand in Atlanta is still high across the 11-county metro area. To counter the effects of this ongoing crisis, FED did an emergency rate cut which put rates at their lowest level in the last 50-year span.

The low-interest rates are already leading to an increase in mortgage applications. Buyers looking for this opportunity to invest or buy a house. Low-interest rates coupled with Atlanta’s solid job market could be a boon for the local real estate market even in the time of the Covid-19 pandemic. Keeping aside the short-term effects of Covid-19 which would hopefully end, the Atlanta housing market is strong. There are no signs of weakness in the Atlanta real estate prices.

In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, Atlanta can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s not going to happen. This housing market is skewed to sellers due to a persistent imbalance in supply and demand.

Whether you’re looking to buy or sell, timing your local market is an important part of real estate investment. For buyers in Atlanta, the mortgage rates are at their lowest. So they should take advantage of scooping up their favorite deals which otherwise are taken away by seasoned investors in the bidding wars.

Please do not make any real estate or financial decisions based solely on the information found within this article. Real estate market forecasts given in this article are just an educated guess and should not be considered financial advice. Many variables could potentially impact the value of a home in Atlanta in 2021 (or any other market) and some of these variables are impossible to predict in advance. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control.

Impact of COVID-19 on The Atlanta Housing Market

We shall now do a quick recap of the impact of the COVID-19 Pandemic on the Atlanta housing market. With social distancing becoming a way of life across the country, Atlanta’s tourism industry has taken a considerable hit in light of this deadly pandemic. Many big events like the NCAA basketball tournament were canceled to avoid the spreading of infection among huge crowds. The local businesses are feeling the brunt of the outbreak, too. The economy is bound to be hit in the short term. However, Atlanta's housing market showed a quick recovery.

The single-family residential housing market in metro Atlanta got impacted by the pandemic with home sales plummeting from April onward. There was a significant reduction of 25.8% in sales for April as compared to last year's numbers. According to the latest report from Atlanta REALTORS® (ARA), residential sales continued to decrease in May as well.

The housing market in Atlanta experienced a 25.8% decline in sales for April as compared to last year. New listings dropped by 32.2% compared to April 2019. April's new listings decreased more than 18% compared to March's new listings as sellers decided to back out in this crisis. Housing inventory in the metro Atlanta area housing market decreased by 13.4% from April 2019. In Fulton County, there were 744 units sold in April at a median price of $405,000 and an average price of $506,000.

Total home sales in May in the 11 counties of metro Atlanta dropped by 37%. The drop in May was steeper than the 25.8% decrease recorded in April. The median sales price in May was $291,000, an increase of 0.3% from last May. The average sales price was $351,000, down 0.6% from the previous year's average of $353,000. As you can see the Atlanta housing prices are holding strong with hardly any decline due to the ongoing pandemic. However, compared to last month (April), the median sales price dropped by 3.6% and the average price dropped by 3.3%.

May residential sales were at 4,085, a decrease of 36.8% from the previous year.

Average and median sales prices continue to gain traction and outpace 2019’s figures, with positive gains.

The median sales price in May was $291,000, an increase of 0.3% from last May.

The average sales price was $351,000, down -0.6% from the previous year.

Atlanta area housing inventory totaled 11,313 units in May, a decrease of 23.7% from May 2019.

New listings totaled 3,915, down 35.8% from May 2019 and up 5.4% from the previous month.

The month’s supply over 12 months decreased to 2.3 months.

Monthly Comparison

Metro Atlanta Housing Statistics	May-20	Apr-20	% Change
Total Home Sales	4,085	4,297	-4.90%
Median Sales Price	$291,000	$302,000	-3.60%
Average Sales Price	$351,000	$363,000	-3.30%

While Atlanta housing prices remain almost steady as compared to last year, the decline in sales reflects the impact of the shelter-in-place order that Metro Atlanta residents had to follow.

Georgia Multiple Listing Service (GAMLS) has released its market recap for August 2020. The following numbers reflect all residential listings sold in the 29 county Atlanta Metropolitan Statistical Area (MSA). It compares the 29-county metro area's housing metrics from August 2020 with August 2019. This information is deemed reliable but not guaranteed.

Month-Over-Month
Atlanta MSA Housing Market Trends	Aug-20	Jul-20	Change
Total Residential Units Sold	9,617	10,251	-6.59%
Median Residential Sales Price	$275,000	$273,825	0.43%
Average Residential Sales Price	$335,661	$328,400	2.16%
Active Residential Listings	14,641	15,442	-5.47%
Residential Inventory	1.91 Months	2.03 Months	-6.44%

 

Year-Over-Year
Atlanta MSA Housing Market Trends	Aug-20	Aug-19	Change
Total Residential Units Sold	9,617	8,770	8.81%
Median Residential Sales Price	$275,000	$243,000	11.64%
Average Residential Sales Price	$335,661	$293,064	12.69%
Active Residential Listings	14,641	22,469	-53.47%
Residential Inventory	1.91 Months	2.96 Months	-54.88%

Residential Units Sold – 2016 – Present

***The most recent housing data has already been discussed above***

Atlanta Real Estate Investment: Where To Buy Atlanta Rental Properties?

Is Atlanta real estate overvalued? Let’s talk a bit about Atlanta and the surrounding metro area. Atlanta is a minimally walkable city in Fulton County with a population of approximately 419,590 people. Atlanta has a mixture of owner-occupied and renter-occupied housing units. According to Neighborhoodscout.com, a real estate data provider, one and two-bedroom large apartment complexes are the most common housing units in Atlanta.

Other types of housing that are prevalent in Atlanta include single-family detached homes, duplexes, rowhouses, and homes converted to apartments. The Atlanta real estate market has had steady growth over the past several years that make it a great place to live as well as invest in. Located in the state of Georgia, the city of Atlanta is a hotspot for any type of real estate investing. It is a city with an incredible amount of upside.

The cost of living in Atlanta is reasonable when compared to other big cities like Los Angeles or New York. Everybody loves the low cost of living in Atlanta but the students especially appreciate it making it one of the top rental markets in the United States. This factor alone draws young professionals priced out of those pricier markets.

If you are a savvy investor, you must be aware of the fact that Atlanta real estate has a record of being one of the best long-term investments in the nation. As an investor, you can buy a fully renovated turnkey rental property in Atlanta. It would be the best option for novice real estate investors looking for a steady rental income. Atlanta is a favorite place to live in for millennials who prefer renting over owning.

In the last five years, Atlanta’s job growth averaged 2.3 percent annually, outpacing the national average of 1.6 percent. The attractive cost of living and a multitude of jobs in various industries has made Atlanta one of the hottest residential and labor markets in the country. It continues to grow in terms of population and employment. The population of Atlanta is predicted to reach 8 million by 2040, according to a survey conducted by the Atlanta Regional Commission.

This will further increase rental demand in Atlanta. Atlanta is Georgia’s capital and economic center. It is considered one of the 10 most productive states that contribute to the USA’s GDP annually. As the city continues to go through an economic boom, prices of turnkey properties in Atlanta are forecasted to increase in the following years. People will want to beat out the competition and purchase soon if they’re looking to develop a successful career, surrounded by a diverse community, especially for today’s youth.

Atlanta has shown promising population growth and employment, which are two signs of a healthy real estate market. In the Atlanta metropolitan area, the leisure and hospitality industry had the largest employment gain from October 2018 to October 2019, up 14,700, or 4.9 percent. Local job gains occurred primarily in the food services and drinking places subsector (+11,400). Nationwide, employment in the leisure and hospitality industry rose 2.3 percent over the year.

Top Reasons To Invest In The Atlanta Real Estate Market?

Atlanta is one of the Top Rental Markets in the U.S. Home prices are less expensive than the national average. Newly renovated turnkey properties with tenants. Turnkey Investment Properties starting at $100,000. Up to 10% Cap Rate. 500 people move to Atlanta every day! 8 million people were expected by 2040 (Atlanta Regional Commission). 3-year appreciation forecast of 9.3%. Key industries include Health Care, Professional, Scientific, Technology & Logistics. Local Rate of Employment Growth Above the National Average (Bureau of Labor Statistics). Atlanta is one of the five markets poised to eclipse Silicon Valley as a national center of technology growth (Forbes).

Buckhead Heights, Atlanta, GA

The urban neighborhood of Buckhead Heights has a population of roughly 2,130 people. Residents have been ranked as A, based on ethnic and economic diversity, with many of its residents having bachelor’s or master’s degrees. The average resident earns approximately $93,009. However, the cost of living falls into a grade of B. There are at least 23 public schools that serve this neighborhood; three having ranked as A-. They are the Smith Elementary School, and the Atlanta Neighborhood Charter School for Elementary, and Middle school.

Public education is given the grade of B. Crime rates are pretty low in this area as it is given the grade of B. In the category of violent crimes, only 47 cases of robberies are reported per year. Unfortunately, the Buckhead Heights neighborhood has some property crime cases. The median value of the homes in this neighborhood is $296,500 and the median rent is $1,809. About 59% of the residents like to rent in this neighborhood.

Hanover West, Atlanta, GA

Located in the northern part of Atlanta, Hanover West was deemed the #1 best neighborhood in the city by neighborhood and school-rating website Niche. With a population of roughly 2,930 people, most residents appear to be young adults with bachelor’s degrees. Regarding ethnic and economic diversity, Niche.com rates Hanover West at a grade of B. Moreover, Hanover West Atlanta has been considered to be one of the safest neighborhoods, with few to no recorded violent crimes in the past year. On average, Hanover West has seen 63 burglary and theft incidents per 100,000 residents.

With about 13% of its population being children, there are about 23 public schools around the area. School ratings average at a B, with the best performing public schools being the Atlanta Neighborhood Charter School for Kindergarten through 8th grade. Its middle school campus is ranked #1 as the best charter school in Georgia. The median value of homes in this neighborhood is around $298,736, while rent prices are approximately $1,190. These rates are considerably worth more when compared to the national average home value and rent prices which are $184,700 and $949, respectively.

Collier Hills North, Atlanta, GA

The lovely neighborhood of Collier Hill North has a population of 3,561 and has a grade of A- regarding ethnic and economic diversity. The median household income of this area is calculated to be $68, 569, and approximately 36% of residents have obtained a bachelor’s degree. Niche.com gave public school education a grade of B-. Of the 23 public schools in this area, two are graded A-. Additionally, Collier Hills North is one of the safest neighborhoods on this list as it is given a grade of A+.

There are no reported violent crimes in the area, and only an average of 52 petty crimes are committed under the theft and burglary category. The cost of living is known to have a grade of B-. The median home value in Collier Hills is $715,177. Collier Hills' home values have gone up 2.4% over the past year and Zillow predicts they will fall -1.3% within the next year. The median cost of rent is approximately $1,289, higher than the national average of $949. Most residents have chosen to buy their homes, instead of rent. Collier Hills is one of the best suburbs to invest in the Atlanta real estate market.

Brookwood, Atlanta, GA

A more extensive neighborhood, Brookwood Atlanta consists of 6,046 people with children compromising 5% of the total population. 48% of its residents are noted to obtain bachelor’s degrees. Regarding median household income, residents of Brookwood earn an outstanding $74,057 annually. It has a grade of A for ethnic and economic diversity. On the other hand, the grade of public school education in this area is a B-. However, among the 26 schools that serve this area, five public schools have a class of at least A.

The Grady High school, Atlanta Neighborhood Charter School of both the Elementary and Middle school campuses receive a grade of A. The Inman Middle School and Springdale Elementary School both received a grade of A-. Brookwood Atlanta has been given a grade of A- regarding crime and safety. In terms of violent crimes, 19 cases of robbery are estimated to occur per 100,000 in a year. However, Brookwood has many instances of petty crimes in its neighborhood.

Despite these grades, Brookwood Atlanta has a median home value of $349,879 and a median rent of $1,432. Given those estimates, it is not a surprise to find that 61% of its resident choose to rent their homes whereas only 39% own their houses. Due to the high population of renters, the Brookwood neighborhood is a great choice to invest in Atlanta rental properties. 

Cross Creek, Atlanta, GA

Cross Creek's neighborhood has located near the Atlanta Memorial Park, with a population of approximately 2,143 residents. In the past year, the website Niche.com has rated it as one of the best places for millennials in the Atlanta area. The neighborhood boasts a high diversity rating based on ethnicity and economic status. Most residents appear to be young adults and adults up to 30 years old with bachelor’s degrees. Only 9% of its population is children.

Cross Creek was given a crime & safety rating of B by Niche.com. Per 100,000 residents, there have been some violent crimes, although all below the national average. As for its motor vehicle theft cases, the neighborhood appears to have a higher-than-average count of 511 cases, compared to the national average of 263.

That being said, Cross Creek housing was given a rating of A-, with its median home value being estimated at $192,795. while the median rent is $1,369. Surprisingly, statistics show that homeowners and renters are split in the area at exactly 50% for both. It is also considered to be a good place to live in Atlanta. Investing in Atlanta rental properties in this neighborhood would be a good investment decision.

Hills Park, Atlanta, GA

Hills Park is another good neighborhood of Atlanta with a population of approximately 54,152. Similar to the other neighborhoods, most of the residents in Hills Park Atlanta have obtained a bachelor’s degree, having a percentage of 45%. White-Collar employment amounts to 86.47 %. The median household income of this area is $47,918. Public school education is given a rank of B-, with 30 public schools serve this area. Among these selections, four schools are given a grade of A- and above.

Grade High School has the highest rank regarding the quality of education with a degree of A. The three remaining schools receive an A-. Hills Park is rated B+ on crime and safety. Only 84 cases of robbery are reported per 100,000 residents in one year. However, a considerable number of petty crimes occur in this area, the majority of them falling under the category of theft.

Nonetheless, it is known as a safe neighborhood among folks. Hills Park Atlanta has a median home value of $305,162. and the median rental price of homes in this area is $1,526. Even so, the majority of residents choose to own their homes. 52% of its residents own their homes, while 48% are renting them. Hills Park is one of the best places for living in Atlanta and can be chosen for investing in rental properties.

Midtown Atlanta, GA

Midtown Atlanta is the second-largest business district in the city of Atlanta, situated between the commercial and financial districts of Downtown to the south and Buckhead to the north. Midtown is home to some of Atlanta's priciest apartments. It is a large area of Atlanta immediately north of Downtown with many sites and activities. The skyscraper district aligns with Peachtree Street. To the east of Peachtree Street is Piedmont Park, and to the west are Atlantic Station and the Georgia Tech campus area. With a population of 22, 539, the neighborhood of Midtown Atlanta is the largest in terms of population.

Only 5% of the total population are children. Like the other neighborhoods, people with a bachelor’s degree are the largest among education levels, consisting of 38% of the population. The middle-class household income in this area is $74,194, which is considerably lower compared to the other neighborhoods. Ethic and economic diversity are graded A. Public school education receives a grade of B-. 28 public schools serve this neighborhood, and six of them have been given a grade of A- and higher. Grady High School boasts the highest grade received, which is A. The remaining schools all receive A-.

Unfortunately, Midtown Atlanta has a low score on the crime and safety portion. With a grade of C, the neighborhood has a lot of recorded violent and property crimes. Nonetheless, residents claim that Midtown is the “pulse of the city”, highlighting that living here is a great experience. Likewise, it gained a high rating in the nightlife category. With these ratings, the median home value of this Midtown Atlanta is at $355,944 and the median rental price is $1,444. 55% of its population chose to rent their homes, while the remaining 44% own them. According to Zillow, Midtown Atlanta's home values have gone up 2.4% over the past year. Therefore, Midtown can be considered for investing in Atlanta rental properties. 

Candler Park, Atlanta, GA

Candler Park is a city park located at 585 Candler Park Drive NE, in Atlanta, Georgia. According to Wikipedia, it is named after Coca-Cola magnate Asa Griggs Candler, who donated this land to the city in 1922. Candler Park Atlanta is another large neighborhood regarding population. According to Point2homes.com, the total population of this neighborhood is 19,652. Similar to the other neighborhoods, public school education in this Candler Park Atlanta has a score of B from Niche.com. Among 26 public schools that serve this area, six of them have a rating of at least A-.

Grady High School has a grade of A, making it the highest quality public school in the area. The other schools are graded with a score of A. Regarding crime and safety, Candler Park Atlanta fares as well as Midtown. It has a grade of C+ and many recorded cases of violent and property crimes. A review indicated that in the case of reported criminal activity, police officers are quick to respond. Its median home value is the second-highest on the list, which is estimated to be $450,226. On the other hand, the median rent in this area amounts to $1,222.

The median household income is $100,885. The majority of the residents own their houses, consisting of 60% of the population. The remaining 40% choose to rent their homes. Given the fact that Candler Park is ranked among the best places to live and raise a family in Atlanta, we recommend this neighborhood for investing in rental properties for the long term. According to Zillow, Candler Park home values have gone up 3.6% over the past year.

North Buckhead, Atlanta, GA

North Buckhead Atlanta is a neighborhood in the Buckhead district, at the northern edge of the city of Atlanta, Georgia, and is one of Atlanta's most affluent neighborhoods. North Buckhead Atlanta is also the second-largest neighborhood in terms of population. It has a population of 10,848, according to Point2homes.com. Despite its large community, it has a grade of A- regarding ethnic and economic diversity on Niche.com.

North Buckhead is an uptown commercial and residential district of Atlanta, Georgia. It mostly consists of large single-family homes that are situated among dense forests and rolling hills. As far as crime is considered, much of Buckhead is considered to be safe, except for the Lindbergh neighborhood.

North Buckhead Atlanta has a higher score on the portion of public school education quality. With a grade of B, 35 public schools serve this area. Though only six of them have a rating of A-. These schools are Atlanta Neighborhood Charter School, The Main Street Lower Academy, Riverwood International Charter School, Smith Elementary School, and Jackson Elementary School. The crime and safety portion has a bit lower score of B-. The area has numerous reported cases of violent and property crimes.

Nonetheless, reviewers describe the region as a “truly great place to live, work, and play.” North Buckhead Atlanta has the highest median home value on the list with $588,242. The median rent price is $1,474. The median household income of people in this area is $134,673. Even so, 53% own their homes while 47% rent them. That's almost half of the total population. North Buckhead home values have gone up 0.2% over the past year and Zillow predicts they will fall -2.3% within the next year. Although the home prices are quite high, this neighborhood is currently a buyer's market and this is the right time to invest in a property.

North Springs, Atlanta, GA

North Springs is a quiet neighborhood and has amazing proximity to everything you could want. It is located in the famous city of Sandy Springs which is the most expensive neighborhood in Atlanta. It is a city in northern Fulton County, Georgia, United States, and part of the Atlanta metropolitan area. Both The North Springs and Sandy Springs Stations were opened on December 16, 2000, as part of MARTA's most recent expansion, adding two more stations north of the Dunwoody Station.

The market temperature is neutral at the moment. It is a balanced real estate market. The median home value in Sandy Springs is $512,458. Sandy Springs home values have gone up 2.3% over the past year and Zillow predicts they will fall -2.0% within the next year. The median household income is around $84,000 and a40% of the population like to rent a house in this neighborhood of Atlanta.

Purchasing the best investment properties in Atlanta appears to be on the pricier end. However, this is because you’re also purchasing other positive aspects of the estate such as security, and community diversity. You’re paying for quality real estate in Atlanta when you decide to buy investment properties in the neighborhoods listed above. One disadvantage may come from families looking for premier schools for their children. Most of the schools surrounding the neighborhoods listed in this article are given ratings of B on Niche.com. Considerably, it may be a not so good decision for parents who want their children to attend the best schools in the country.

That being said, Atlanta appears to be a wise choice of city for the youth. In many of the above-mentioned neighborhoods, their residents seem to be young adults, based on their educational attainment. Likewise, Atlanta has come to be a bustling economic center. This is an advantage for people looking to begin or improve their careers. Good cash flow from Atlanta rental property means the investment is, needless to say, profitable. On the other hand, a bad cash flow means you won’t have money on hand to repay your debt. Therefore, finding a good Atlanta real estate investment opportunity would be key to your success.

When looking for real estate investment opportunities in Atlanta or anywhere in the country, the generally accepted standard is to purchase a property that will give you a modest but minimum 1% profit on your investment. An example would be: at $120,000 mortgage or investment cost, $1200 per month rental. That would be the ideal equation for example. Even with rent increases, buying a $500,000 investment property in Atlanta is not going to get you $5000 per month on rent.

When looking for the best real estate investments in Atlanta, you should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable. The neighborhoods in Atlanta must be safe to live in and should have a low crime rate.

The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. A cheaper neighborhood in Atlanta might not be the best place to live in. A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals in Class A neighborhoods.

Atlanta, Georgia Real Estate Investment Opportunities

Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.

NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Atlanta.

Consult with one of the investment counselors who can help build you a custom portfolio of Atlanta turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Atlanta.

Not just limited to Atlanta or Georgia but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Atlanta turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.

Georgia's real estate market is a great place to invest in real estate. You can also invest in Savannah real estate market. Savannah, Georgia is separated from South Carolina by the namesake Savannah River. This means the Savannah housing market includes quite a few people living in South Carolina. The Savannah real estate market includes roughly 350,000 people. This makes it the third-largest metropolitan area in Georgia. If you take the de facto suburbs on the Carolina side, these small towns put half a million people in the larger Savannah metro area.

Georgia is bordered to the north by Tennessee and North Carolina, to the northeast by South Carolina, to the south by Florida, and to the west by Alabama. All of these states have some of the best real estate markets where you can buy rental properties.

Charlotte is one such place that we would recommend. Charlotte is the largest city in North Carolina. The city proper is home to more than 800,000 people. The Charlotte Metropolitan Statistical Area is even larger – home to roughly two and a half million people.

It is one of the country’s fastest-growing metro areas, and it was the second fastest-growing city in the southeastern United States. Buying real estate in Charlotte is a good investment, depending upon several factors.

There are so many major companies and professional sporting events that people will always be interested in residing here. Therefore, interested investors aren't likely to allow the listing prices to get too low before they swoop in and take advantage.

On the west of GA is the state of Alabama. Birmingham, Al has seen an upward trend in terms of its population growth. One factor that has led to this increase is its rich nature of mountainous ridges and a good share of physical scenery.

Since its year of discovery, the city has been an educational center of the state of Alabama and has been the favorite destination of many educational aspirants who come here to seek the careers of their choice. Hundreds of schools have been set up in the city of Birmingham and several top-notch universities.

The city's ever-growing population shows a need for real estate investments and developments for the good of the new growing population. There are several good reasons to invest in Birmingham properties.

Let us know which real estate markets in the United States you consider best for real estate investing! 

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Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US. 

References:

Market Prices, Trends & Forecasts
https://www.gamls.com/statistics
https://www.atlantarealtors.com/
https://www.zillow.com/atlanta-ga/home-values
https://www.atlantarealtors.com/Resource-Center/abr-market-brief.aspx
https://www.realtor.com/realestateandhomes-search/Atlanta_GA/overview
https://www.realwealthnetwork.com/markets/atlanta-georgia
http://www.metrodepth.com/atlanta/
http://www.justluxe.com/travel/atlanta-news__1899269.php
https://www.bizjournals.com/atlanta/news/2020/06/15/metro-atlanta-housing-sales-tumble-37-may.html
https://atlanta.curbed.com/2020/3/17/21182334/coronavirus-atlanta-home-buying-real-estate-covid-19

Foreclosures
https://www.realtytrac.com/statsandtrends/ga/fulton-county/atlanta

Neighborhoods & Statistics
https://www.niche.com/places-to-live/search/best-neighborhoods/t/atlanta-fulton-ga
https://www.homesnacks.net/richest-neighborhoods-in-atlanta-128964
https://www.point2homes.com/
https://www.zillow.com/

 

The California housing market ended the previous year on a high note as sales remained strong in December and the median house price reached another record high. The same momentum has been carried forward in 2021 as the housing market in California remains fiercely competitive. Despite a new record sales price, growth slowed and pending sales dipped for the first time since May 2020, as reported by C.A.R. for June 2021. Homes in California are on the market for a median of seven days before going under contract, with 70% of homes selling for more than their asking price.

California's median home price set a new record high for the fourth consecutive month in June, rising 0.2 percent month over month to $819,630, up from $818,260 in May and 30.9 percent from $626,170 in June last year. For the third month in a row, the median price in California remained above the $800,000 mark, and it was the third month in a row that the state had an annual increase of more than 30%.  It was the third time since June 2013 that the state recorded an annual increase of over 30 percent, according to the California Association of Realtors (C.A.R.).

Tight inventory and low mortgage rates, similar to national housing market trends, are fueling the rise in California home prices. While this type of price appreciation has an impact on housing affordability, higher home prices should encourage more sellers to list their homes for sale, slowing the rate of appreciation. However, the rate of increase in home prices appeared to be slowing, as the difference between May and June remained below one percent, and the increase was the smallest in four months. Another interesting statistic is that the statewide median price increase in June 2021 was slightly lower than the 1.0 percent average May-to-June growth rate observed between 1979 and 2020.

Home sales in June fell 2.2 percent from 445,660 in May but were up 28.3 percent from a year ago when 339,910 homes were sold on an annualized basis. Closed escrow sales of existing single-family detached homes in California totaled 436,020 in June, according to a seasonally adjusted annualized rate of 436,020. With strong sales growth in June, the state housing market ended the first half of the year with a 33.6 percent year-to-date increase. Higher-priced markets performed well, while lower-priced property sales remained below last year's levels.

Pending sales are down for the first time in 14 months. The overheated housing market is showing signs of a much-needed cooling, which could indicate waning buyer interest as a result of the rapid pace of home price increases and buyer fatigue. However, the number of new listings increased in June, as did the share of listings with a reduced price and the median reduction amount, providing buyers with more options.

Housing price gains were widespread with all the 51 counties in the state seeing annual price gains and 47 of them reporting at least a double-digit growth rate from last June. Twenty-five counties set new record high median prices in June. Del Norte had the largest price gain of 48.1 percent in June, followed by Siskiyou (40.5 percent) and Santa Barbara (39.2 percent).

In June 2021, four of the five major regions set new highs for median prices, with each region increasing by more than 20 percent from a year ago. The San Francisco Bay Area continues to have the highest year-over-year gain of 35 percent, followed by Southern California (30.3 percent), the Central Valley (23.8 percent), the Far North (22.0 percent), and the Central Coast (20.8 percent).

• The San Francisco Bay Area had the highest year-over-year gain of 35 percent, with the median price being $1,350,000.
• Southern California had a year-over-year price gain of 30.3 percent, with the median price being $766,000.
• The Central Valley had a year-over-year price gain of 23.8 percent, with the median price being $452,000.
• The Far North had a year-over-year price gain of 22.0 percent, with the median price being $380,000.
• The Central Coast had a year-over-year price gain of 20.8 percent, with the median price being $890,000.
• The Los Angeles Metro Area had a year-over-year price gain of 33.4 percent, with the median price being $737,500.
• Inland Empire had a year-over-year price gain of 28.0 percent, with the median price being $525,000.

California is a seller’s market and home prices have reached new record-highs across all the regions due to tight supply. Homes are moving nearly 46% faster than a year ago; the median time on the market was 8 days in June. Nearly 70% of homes sold above the asking price in May. New construction can’t keep up with demand in the California housing market. Every major region saw home prices continuing to increase from last year by double digits as buyers competed amid a shortage of homes for sale.

There is an increase in demand leading to bidding wars and subsequent higher selling prices. These trends show us that the California housing market remains very competitive. Growth of sales are prices are driven by low mortgagee rates, buyers seeking more living space, and a perennial shortage of houisng supply. Homes are selling quickly with a minimal price reduction. The statewide sales-price-to-list-price ratio was 104.1 percent in June (a record high). If it's above 100%, the home sold for more than the list price. If it's less than 100%, the home sold for less than the list price.

High demand across all of California's sub-markets means that low inventory and lightning-fast market conditions are not going away soon. There just aren’t enough homes listed for sale to satisfy the demand from buyers. Typically, the housing supply rises during this time of year and continues to rise until late July/early August. More new listings were added, but they remained below the pre-pandemic level. C.A.R.’s Unsold Inventory Index (UII) remains low at 1.7 months in June, slightly down from May but remained sharply below last year’s level. The index indicates the number of months it would take to sell the supply of homes on the market at the current rate of sales.

Will The Housing Market Go Up or Down in California?

Each month C.A.R. surveys 1,000 California consumers regarding their sentiments about various aspects of the housing market or the economy that directly impact housing to create a California Housing Sentiment Index. In June 2021, the overall housing sentiment index reached 72 (-2 from last month). The California housing market is showing signs of normalization, as high prices and a competitive, gradually improving economy continue to entice more sellers back into the market.

Furthermore, C.A.R. reported last week that June was another double-digit month in the state for both sales and prices. Mortgage rates, on the other hand, have begun to fall modestly, which may combine with slightly more inventory in the coming weeks to fuel a rebound in potential homebuyers. Encouragingly, the number of new listings being added to the MLS each day has finally started to exceed closed sales and C.A.R. is still forecasting at least 10% growth in home sales this year. If the economy improves, rates could keep rising slowly, but many experts expect borrowing costs to remain low by historical standards throughout 2021. Here's what consumers feel at this time.

Is it a good time to buy a home in California?

C.A.R.’s monthly Consumer Housing Sentiment Index for June 2021 found that only 19% of consumers believe that now is the good time to buy a home, and 81% think this is not a good time to buy. That’s no change in this consumer sentiment from last month. As a result of continuously rising prices in all the major regions, the housing market sentiment also shows that only 25% of the consumers feel that it will be easier to find a home over the next twelve months (+2 from last month's survey). 75% said it won't be easier.

Is it a good time to sell a home in California?

According to the survey, 68 percent of Californians believe now is a good time to sell a home. That’s a decrease of -4 over the May 2021 poll. More than half of the consumers (61%) who participated in the survey feel that home prices will rise in the 12 months. That’s a decline of -1 from the previous month. Only half of the people are optimistic about the economy's recovery. 47% (-1 from last month) believe that economic conditions will improve in the state over the course of the next 12 months while 53% still have a gloomy outlook.

California Housing Market Trends 2021 (Describes June)

Here are some of the key points of the California housing market report for June 2021, according to the July 16 release by C.A.R.

Existing-Home Sales

• With strong sales growth in June, the California housing market ended the first half of the year with a 33.6 percent year-to-date increase.
• Higher-priced markets performed well, while lower-priced property sales remained below last year's levels.
• Over last year, demand for million-dollar homes increased by triple digits, with sales of homes priced $2 million and above increasing by 141 percent.
• Sales of homes priced under $300,000, on the other hand, continued to fall steeply in June, with the year-over-year growth rate falling by 48 percent.
• Tight housing supply remains the primary constraint on sales in the lower price segment.
• In the second quarter of 2021, the state sold more homes in the million-dollar market than in the sub-$500,000 market, which has never happened in California before.
• At the regional level, all major regions had at least double-digit year-over-year growth in sales from last June.
• The San Francisco Bay Area had the highest year-over-year increase of 34.1 percent with seven of the nine counties increasing more than 29 percent from a year ago.
• Southern California came in second with a growth rate of 33.9 percent from last year.
• The Central Coast region also experienced double-digit year-over-year increases of 26.6 percent in sales from a year ago.
• The Far North posted a sales gain of 17.6 percent.
• The Central Valley also remained strong and experienced double-digit, year-over-year sales growth of 10.5 percent.
• Nearly nine out of 10 counties — 44 of 51 — tracked by C.A.R. had a year-over-year increase in closed sales in June.
• Sales in 39 counties surged by more than 10 percent from last year.
• Mono had the strongest growth in sales from a year ago at 100 percent, followed by San Francisco (87.1 percent), and Del Norte (80 percent).
• Six of the counties with more than 100 percent growth rate had a median price above $1 million in May 2021.
• Six counties had a sales decline from last year, with Glenn dropping the most (-57.1 percent).

California Median Home Price

• In June,  four of the five major regions set new highs for median prices, with each region increasing by more than 20 percent from a year ago.
• The San Francisco Bay Area continued to have the highest year-over-year gain of 35.0 percent.
• Southern California was the second strongest growing at 30.3 percent.
• The Central Valley had the third-highest price growth rate of all regions with its median price increasing 23.8% year-over-year.
• The Far North had a growth rate of 22% year-over-year and the Central Coast region posted a growth of 20.8 percent.
• All 51 counties tracked by C.A.R. reported a gain in median price on a year-over-year basis.
• 47 of them reporting at least a double-digit growth rate from last June.
• Twenty-five counties set new record high median prices in June.
• Del Norte had the largest price gain of 48.1 percent.
• Lake had the smallest price growth of all counties with a 3.9 percent increase from June 2020.

California Housing Supply

• California's housing supply has continued to improve, with active listings reaching their highest level since October of last year.
• Housing supply normally rises during this time of year and continues to rise until late July or early August.
• The number of for-sale properties increased 15.4 percent from the previous month in June, as more homes were listed on the market.
• While new active listings were still down 12.3 percent from two years ago, they increased by around 8% month over month and year over year in June 2021.
• Almost all counties reported by C.A.R. saw a drop in active listings from last June, with 47 seeing a double-digit drop when compared to the same time last year.
• Marin had the biggest decline in active listings, plunging 59.0 percent year-over-year.
• Sutter (17.8 percent), Lassen (8.9 percent), and Stanislaus (0.5 percent) were the only counties in the state with an increase in active listings from the prior year.
• The Unsold Inventory Index (UII) dropped slightly from 1.8 months in May to 1.7 months in June but remained sharply below last year’s level.
• The index indicates the number of months it would take to sell the supply of homes on the market at the current rate of sales.

Median Days & Sales Price to List Price Ratio

• The median number of days it took to sell a California single-family home decreased to 8 days in June, down from 19 days in June 2020.
• C.A.R.’s statewide sales-price-to-list-price ratio posted a record high in June at 104.1 percent and was 99.5 percent in June 2020.
• Looking at sale-to-list percentages can help buyers and sellers get a sense of how to negotiate on pricing. The higher ratio of 100% or above shows a strong market favoring sellers.
• The statewide average price per square foot for an existing single-family home remained elevated.
• At $391, June's price per square foot was an all-time high.
• The price per square foot was $293 in June 2020.

Mortgage Interest Rate

• The 30-year, fixed-mortgage interest rate averaged 2.98 percent in June, down from 3.16 percent in June 2020, according to Freddie Mac.
• The five-year, adjustable mortgage interest rate was an average of 2.56 percent, compared to 3.09 percent in June 2020.

California Housing Market – Regional Sales and Price Trends – June 2021

At the regional level, all major regions saw sharp sales gains in June, with each region growing at double-digit from last year. The San Francisco Bay Area had the highest year-over-year increase of 34.1 percent, with seven of the nine counties increasing by more than 29 percent. In June, four of the state's five major regions set new record high median prices, with each region increasing by more than 20% from a year ago. The San Francisco Bay Area continues to grow at the fastest pace with a year-over-year gain of 35.0 percent.

These monthly and yearly trends numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? Home sales rebounded in June 2020 for the first time since the pandemic and California’s median home price reached $626,170, improving 6.5 percent from May and 2.5 percent from June 2019.

The monthly price increase was higher than the historical average price change from May to June and, in fact, was the highest ever recorded for a May-to-June change. Factors are businesses reopening, mortgage payments are falling, and some sellers are more ready and eager to sell. Sales remain strong in a traditional off-season and this year looks promising across the region.

It looks like 2021 will end with a new record at home sales and prices. All 51 counties tracked by C.A.R. reported a gain in median price on a year-over-year basis, with 47 of them reporting at least a double-digit growth rate from last June. Nearly nine out of ten counties — 44 of 51 — tracked by C.A.R. recorded a year-over-year sales increase in June. Whether you’re looking to buy or sell, timing your local market is an important part of real estate investment.

For sellers in the California housing market, it is a good time to sell. A low inventory would keep the prices from falling. Sales Price to List Price ratio has been 104.1% in June 2021. 70% of homes were sold above their initial asking prices on MLS. A seller would always prefer this ratio to be close to 100% or higher.

For buyers in the California housing market, it is a good time to buy. Low interest rates continue to fuel optimism for homebuying. The 30-year, fixed-mortgage interest rate averaged 2.98 percent in June, down from 3.16 percent in June 2020, according to Freddie Mac. Interest rates remain low giving buyers the purchasing power and home prices a boost. Fortunately, new listings have finally started to rise, which could help to sustain a higher level of home sales deeper into summer by providing much-needed supply.

All of these factors have led the market to optimism in homebuyers. Recent forecasts from industry groups like Freddie Mac and the Mortgage Bankers Association have predicted that the average rate for a 30-year fixed mortgage could stay within the low 3% range well into 2021.

Six California Metros Feature in The Top 20 Hottest Housing Markets 

Realtor.com takes into account market demand and the pace of the market to determine an area’s hotness. That is determined by the number of unique viewers per property and the number of days a listing is active on Realtor.com’s website. In their latest hottest housing markets report for March 2021, California had six in the top 20, more than any other state.

These hottest markets saw median listing prices 18.9% higher, on average than the national price in March. The report shows that spillover and secondary markets continue to dominate the list as buyers prioritize space while remaining close to major hubs.

Vallejo-Fairfield metro area was no. 3, with the median listing price of $550,000. It had the lowest median number of days on the market, at 11. It has been on the company’s top 20 list for the last several years. Other Northern California cities in the top 20 include Yuba City in Sutter County, which came in seventh place with a median listing price of $427,000.

The Santa Cruz-Watsonville metro area was No. 8, with a median listing price of $1.2 million, and Stockton-Lodi metro area followed at No. 9 with a median listing price of $468,000. The Modesto area came in at No. 12, with a median listing price of $499,000. And in the far northwest corner of the state, the Eureka-Arcata-Fortuna area came in at No. 18, with a median listing price of $439,000.

California Housing Market Forecast 2021-2022 (Latest Projections)

What are the California real estate market predictions for 2021 & 2022? California housing market is shaping up to continue the trend of the last few years as one of the hottest markets in the U.S. The median price of an existing single-family house in 2021 is expected to be $795,600, up 20.7 percent from the 2020 median. That is a $136,000 increase from last year – and an almost $300,000 increase over the last five years.

This year's home sales are expected to total 444,500, representing a 7.9 percent increase over last year's total and the biggest total in 12 years. As a result, despite some slowdown in sales in the second half of the year, CAR Deputy Chief Economist Oscar Wei predicts that prices will continue to rise. Active listings were down by at least 40% in the first five months of the year, but they are expected to grow in the summer and fall, when home buying slows and housing inventory rises. This will result in “normal” price and sales growth in the future.

Let us look at the price trends recorded by Zillow over the past few years. Since 2012, the California home values have appreciated by nearly 114% — Zillow Home Value Index. ZHVI is not the median price of homes that are sold in a month within a geographic region. It is calculated by taking all estimated home values for a given region and month (Also called Zestimates), taking a median of those values, applying some adjustments to account for seasonality or errors in individual home estimates.

It, therefore, represents the whole housing stock and not just the homes that list or sell in a given month. By this calculation, the current typical home value of homes in California is $654,629. It indicates that 50 percent of all housing stock in the area is worth more than $654,629 and 50 percent is worth less (adjusting for seasonal fluctuations and only includes the middle price tier of homes).

In May 2020, the typical value of homes in California was around $583,000. Home values have gone up 12.5% over the last twelve months. It can be said that California is currently the seller's real estate market which means that demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations.

There are fewer homes for sale than there are active buyers in the marketplace. Buyer demand remains robust, which has been pushing home prices up by a double-digit rate of appreciation. Although the latest price forecast is not available earlier Zillow had predicted a growth of 10.6% in ZHVI by November 2021.

Courtesy of Zillow.com

Latest Weekly Trends & Forecast From California REALTORS®

CAR's latest weekly housing data for the week ending July 17, 2021, shows that since the recovery began, housing has been at the forefront of economic growth, but multiple indicators suggest that hot market conditions are driving the market to cool sooner than expected. Even though the overall level of existing single-family transactions is still falling from 15-year highs reached at the end of 2020, the housing market posted another large gain last month. Although home prices hit a new high of nearly $820,000 in June 2021, there were 28% more transactions than in June 2020.

After increasing for 53 weeks in a row, the number of existing single-family home sales fell for the second week in a row. C.A.R. had anticipated a slight softening of the market because mortgage applications had been trending downward for the previous six weeks and our monthly measure of pending sales fell in June for the first time since the recovery began. Fortunately, new listings are still increasing, which should contribute to a robust level of transactions in the second half of 2021, albeit at slightly lower levels than a few months ago.

California REALTORS® are not quite positive about the market as we move into the seventh month of the summer homebuying season. Only 32% (-21% from the previous week) of them expect sales to improve in the upcoming week, while nearly 33% believe prices will increase from the prior week. However, with the passing of the American Rescue Plan Act, the economic outlook is more positive than it was a couple of months ago when California was still under a lockdown.

The economy is slowly recovering. There was strong growth in employment in May & June and a surge in consumer confidence to the highest level in the year. California ended May with its 9th consecutive week with fewer than 100,000 new claims for pandemic and traditional unemployment insurance. With less than 65,000 new unemployment claims filed, last week also marks the smallest number of claims since March of 2020. As the economy is poised to reopen in the coming weeks, many of the service sector jobs, which bore the majority of the job losses, are expected to begin to recover.

Tight supply, however, remains a concern as it continues to hold back demand and continues to put pressure on affordability. Although the amount of new listings entering the MLS is still below normal levels, more sellers are putting their homes on the market, providing potential homebuyers with more options. The total number of active listings available for sale on the MLS has been steadily increasing over the last few weeks. This means that homebuyers will have more options when conducting their home search, and this trend is likely to be responsible for the slight increase in time on the market and the very slight decrease in competitiveness we've seen in recent weeks.

On the flip side, the economic recovery will continue to put upward pressure on mortgage rates. Rates are still below last year’s level though and they should remain so in July/August. With slightly more inventory on the market and an economy that is expected to gradually recover, buyer demand should begin to respond to the increase in purchasing power—especially if inflation fears cause would-be homeowners to fear higher interest rates in the future. In the short term, the 10-year Treasury note continues to support downward pressure on mortgage rates.

The 10-year was relatively stable at 1.37% last week, which is up slightly from the week before, but down noticeably from just a few months ago. Mortgage rates dipped last week to 2.88 and it was the third week in a row where rates came down. The number of new home purchase applications has fallen for the past two months consecutively even though interest rates have gradually fallen below 3% again.

Fewer California REALTORS® expect prices and listings to go up in the coming week. The results from the latest C.A.R. weekly survey suggest that nearly 33% (-9.6%) expect prices to go up next week. They believe housing demand is still stronger than normal so far in 2021, and tight supply will continue to put upward pressure on housing values.

Survey results also suggest that supply will remain tight as 42.3% of those who responded to the survey believed listings will increase in the following week, which is 8.9% less than last week. Therefore, robust price growth will not ease up until some balance between supply and demand is restored. Low interest rates, which are still low, could give buyers the purchasing power and home prices a boost.

California’s housing market forecast for 2021 is on the positive side but things could vary a bit, given the seriousness of the ongoing pandemic. Here's a rundown of the latest market trends.

• All parties involved – buyers, sellers, and agents – agreed that home prices will likely remain on their upward trend in the short term.
• 33.3% (-9.6%) of California Realtors® feel prices will rise in the coming weeks.
• 32.2% (-21.3%) think that sales will grow in the coming weeks.
• An average of 838 daily closed transactions was reported in the past week. That is up 3.2% week-over-week.
• An average of 947 contracts was signed per day in the past week. That is up 12.8% week-over-week.
• Seller's optimism continues to dip in the latest weekly trends. An average of 1023 new listings per day was reported in the past week, which represents a decline of -3.6%.
• About 42.3% (-8.9%) of California Realtors® think listings will be up next week.
• Interest rates always fluctuate, just as the real estate market does.
• We don’t see huge changes ahead in the coming months.
• They could fluctuate as more economic data become available throughout the year but the average 30-year fixed-rate average will likely stay close to 3 percent in 2021.
• A few months back, Zillow had predicted that home prices will rise by 10.6% until November 2021.
• Most California sub-markets saw big home-price gains in 2020.
• The same trend is being seen in 2021.
• All 51 counties tracked by the association reported a gain in median price on a year-over-year basis, as tight supply and heated market competition continued to put upward pressure on home prices.
• An ongoing shortage of supply is the main reason for price appreciation.
• With the cost of borrowing at historic lows, buying a home makes more sense than renting for many first-time buyers.
• For repeat buyers, there is an increasing desire for a larger second home.
• Affordability is at the Lowest Level Since Mid-2018, according to C.A.R.’s Traditional Housing Affordability Index (HAI).
• The percentage of buyers who could afford to purchase a median-priced home in California in the first quarter of 2021 dropped to 27% from 35% in the first quarter of 2020.
• The C.A.R.’s 2020 Annual Housing Market Survey finds that 39 percent of REALTORS^® who responded said their buyers are opting for a bigger home.
• This trend is likely to continue in 2021 as well.
• 35 percent said buyers are opting for a property with more rooms.
• 37 percent said buyers are opting to live in a suburb rather than a city.
• 26 percent said buyers are opting to live in rural areas rather than cities or suburbs.

Here's a rundown of the forecast released by CAR on April 27, 2021. 

This year, the California Association of Realtors’ economic forecast looks at several scenarios in predicting whether home prices and sales will rise or fall in 2021. Low mortgage interest rates and pent-up demand will bolster California home sales in 2021.

• The housing market still doing unseasonably well in 2021.
• Lots of buyer demand amidst all-time low rates.
• Time to get serious about supply & new construction impacting much more than just the real estate market.
• 2nd worst Jobs-to-Construction ratio in the nation.
• 2nd worst state for overcrowded housing.
• Ominous trends for the population and economy.
• In the previous forecast released in October 2020, the sales figure was projected to be 4.5 percent lower compared with the pace of 397,960 homes sold in 2019.
• However, the California housing market data closed unexpectedly above 2019's figures.
• Existing sales YTD were +3.5% above 2019.
• $717,930 record-setting median price in December.
• The CAR's latest forecast points towards an increase in existing single-family home sales by 11.2 percent in 2021.
• The California median home price is forecasted to edge up 8.0 percent in 2021, following an 11.3 percent increase in 2020.
• Low mortgage rates are expected to continue to fuel price growth.
• The average 2021 rate for a 30-year fixed-rate mortgage will be 3.0%, down from 3.1% in 2020.
• Housing Affordability Index is projected to be 27%, down from last year when it was 32%.
• Affordability will prevent many from achieving ownership.

Impact of COVID-19 on The California Housing Market (Summary)

Before the coronavirus outbreak, the declining interest rates bolstered February home sales and prices in the California housing market. The no. of home sales in February went up 6.6 percent from the 395,700 level in January, marking the first time in three months that sales jumped above the 400,000 benchmarks. February also marked the eighth consecutive month of year-over-year sales increases, according to the CALIFORNIA ASSOCIATION OF REALTORS^®.

According to a United States Department of Commerce report, the median price nationwide for a home sold in February was $345,900, up 6.3 percent from January. As the coronavirus pandemic hit the country, the sales activity in the California housing market took a sharp decline. Many buyers backed out of purchase due to coronavirus concerns. Due to the Covid-19 outbreak, the new California home sales also began to drop from March onward. Here's the review of the California real estate market from March onward.

Impact of COVID-19

The immediate impact of the coronavirus pandemic on the California housing market was that realtors canceled their open houses and half of all agents reported a drop in buyer interest. A flash poll conducted by C.A.R. between March 14-16 found that 54% of realtors had buyers who backed out from buying a home because of the coronavirus, and about 45% had sellers who backed out from selling a property. The pandemic further impacted the buying or selling of a house as California issued a statewide ‘stay at home’ order on March 19 to slow the spread of the coronavirus.

All non-essential businesses were essentially shut down. The real estate industry and many businesses that support it have been deemed non-essential. Real estate transactions like home buying, title research, residential leasing, and renting were allowed to continue. So were things like building maintenance and cleaning. Home construction was typically allowed to continue, as well. This meant that people could continue to live in their apartments and call the property manager to get the plumbing fixed.

Home sales and purchases already begun could be completed. However, it became much more difficult to arrange open houses or take photos of a property for sale. Some realtors adapted by setting up virtual showings of properties, whether it was via cell phone video, high-resolution photos, or drone. However, photographers can’t travel to properties, while stagers and appraisers can’t travel to homes that owners want to sell.

This froze the housing market for the most part due to shelter-in-place orders. Financial services were considered essential; this included banks and mortgage lenders. Unfortunately, the shutdown of up to 80 percent of the country means many are afraid to take out a home loan even if they still have a job. That is why mortgage applications fell by 30 percent in the last quarter of March 2020 while unemployment applications hit a record three million.

The U.S. Initial Unemployment Insurance Claims are that over 40 million people have already lost their jobs.

As new coronavirus cases were detected in California and the ‘shelter-in-place’ mandate was extended, a sharp sales decline increased unsold inventory – leading to a balanced real estate market. The COVID-19 pandemic kept both buyers and sellers on the sidelines in the California housing market. Many potential sellers delayed putting their homes on the market, which led to fewer new listings. Some buyers were excited and decided not to enter the market due to their weak financial condition. California home sales experienced the worst month-to-month sales decline in more than four decades.

According to C.A.R, home sales dropped sharply in April from both the previous month and year as the housing market began to feel the full impact of the state’s stay-at-home order.

This was because of a decline in open houses and home showings that are impossible to hold in such conditions.  Existing, single-family home sales totaled 277,440 in April on a seasonally adjusted annualized rate, down 25.6 percent from March and down 30.1 percent from April 2019. Additionally, sales in escrow were also delayed by the closure or limited availability of all the essential services related to a home sale.

The statewide median price remained above the $600,000 benchmark for the second consecutive month in April, price growth showed clear signs of softening when compared to the past six months. The April statewide median price of $606,410 for existing single-family homes in the state dipped 1.0 percent from March, and the 0.6 percent gain was essentially flat from April 2019, when the median price was $603,030. The year-over-year price gain was substantially smaller than the six-month average gain of 7.8 percent recorded between October 2019 and March 2020.

California home sales fell to the lowest level since the Great Recession as the housing market suffered the full impact of the coronavirus pandemic in May, according to a June 16 release by CALIFORNIA ASSOCIATION OF REALTORS®. As housing demand in California fell sharply in May, home prices also took a dip. The median home price fell below last year’s price for the first time since February 2012 and breaking the state’s 98-month year-over-year price gain streak.

All major regions dipped in sales by more than 35 percent from last year. The Bay Area and Central Coast dropping the most at -51.1 percent each. Southern California home sales dropped by -45.6 percent, and the Central Valley by -36.6 percent. Existing single-family home sales were down by 13.9 percent from April and down by 41.4 percent from May 2019. May’s statewide median home price was $588,070, down 3.0 percent from April and down 3.7 percent from May 2019. Year-to-date statewide home sales were down 12.9 percent in May.

Median prices continued to dip in May from last year in the Central Coast and the Bay Area but inched up slightly in the Central Valley region. The median home price was virtually unchanged in Southern California. The unsold inventory index jumped to 4.3 months in May from 3.4 months in April and was up from 3.2 months in May 2019. Total active listings continued to decline on an annual basis for the 11th consecutive month.

The 34 percent year-over-year decrease in listings was the biggest drop since March 2013. The median number of days it took to sell a California single-family home dipped to 17 days in May from 18 days in May 2019. C.A.R.’s statewide sales-price-to-list-price ratio was 99.7 percent in May 2020, up slightly from 99.3 in May 2019.

After the California real estate market suffered its worst month in 13 years, California’s Realtors and landlords saw a big rebound in June. The housing markets in Los Angeles, San Francisco, San Jose, San Diego, and Sacramento saw the biggest recovery. Home Sales were up 42.4 percent from May and down 12.8 percent from June 2019. The luxury market suffered the most with more than 50% drops in sales. Sales Price to List Price Ratio of 99.5% in June means homes are selling very close to their listing prices.

June’s statewide median home price was $626,170, up 6.5 percent from May and up 2.5 percent from June 2019. Throughout the state, single-family home prices rose 6.5% to $626, 170, or a rise of $38,000 from the previous month. Sales grew 42.5% from May. California condo prices rose 4.6% and month-to-month sales increased by 68.5%. Condo prices have risen 4.6% YoY while sales slumped 16.2%.

The return in the COVID-19 cases remains a concern across the nation as well as California, and it may hinder the recovery of the housing market in the second half of 2020. Meanwhile, the lowest ever mortgage rates have been able to increase buyer activity, which in turn may help to sustain the rise in sales in the coming months.

After falling to the lowest level since the Great Recession, continued to improve in August as home sales climbed to their highest level in more than a decade. The median home price broke last month’s record and hit another high, according to the September 16 release by C.A.R.

Existing, single-family home sales totaled 465,400 in August on a seasonally adjusted annualized rate, up 6.3 percent from July and up 14.6 percent from August 2019. August’s statewide median home price was $706,900 up 6.1 percent from July and up 14.5 percent from August 2019. Year-to-date statewide home sales were down 6.8 percent in August.

In September, the California housing market outperformed expectations, breaking a record high median price for the fourth straight month. Existing, single-family home sales totaled 489,590 in September on a seasonally adjusted annualized rate, up 5.2 percent from August and up 21.2 percent from September 2019.

September’s statewide median home price was $712,430 up 0.8 percent from August and up 17.6 percent from September 2019. Year-to-date statewide home sales were down 3.7 percent in September. The home price exceeded the $700,000 mark for the second consecutive month.

Existing, single-family home sales totaled 484,510 in October on a seasonally adjusted annualized rate, down 1.0 percent from September and up 19.9 percent from October 2019. October’s statewide median home price was $711,300 down 0.2 percent from September and up 17.5 percent from October 2019. Year-to-date statewide home sales were down 1.3 percent in October.

Existing, single-family home sales totaled 508,820 in November on a seasonally adjusted annualized rate, up 5.0 percent from October and up 26.3 percent from November 2019. November’s statewide median home price was $699,000 down 1.7 percent from October and up 18.5 percent from November 2019. Year-to-date statewide home sales were up 1.3 percent in November.

Existing, single-family home sales totaled 509,750 in December on a seasonally adjusted annualized rate, up 0.2 percent from November and up 28 percent from December 2019. December’s statewide median home price was $717,930, up 2.7 percent from November and up 16.8 percent from December 2019. For 2020 as a whole, sales of existing statewide homes were up 3.5 percent from last year.

Existing, single-family home sales totaled 484,730 in January 2021 on a seasonally adjusted annualized rate, down 4.9 percent from December and up 22.5 percent from January 2020. January’s statewide median home price was $699,890, down 2.5 percent from December and up 21.7 percent from January 2020.

Existing, single-family home sales totaled 462,720 in February 2021 on a seasonally adjusted annualized rate, down 4.5 percent from January and up 9.7 percent from February 2020. February’s statewide median home price was $699,000, down 0.1 percent from January and up 20.6 percent from February 2020, according to C.A.R.

Existing, single-family home sales totaled 446,410 in March 2021 on a seasonally adjusted annualized rate, down 3.5 percent from February and up 19.7 percent from March 2020. March’s statewide median home price was $758,990, up 8.6 percent from February and up 23.9 percent from March 2020. Year-to-date statewide home sales were up 17.1 percent in March.

Conclusion

The most important thing to remember is that it is a health crisis – not an economic one. This pattern differs from a standard economic recession, which is a situation in which economic activity falls for 6-18 months and then recovers more slowly. Due to a wave of job losses nationwide, this will create many distressed home sellers in the California real estate market. Yet this is a buying opportunity for investors who have financing.

The slowdown in what is normally a busy season will cause some realtors to go out of business. Mortgage brokers and lenders will experience a boom in business since record low-interest rates cause a spike in mortgage refinances. We’ll also see a flurry of activity in the California real estate market as people pick up where they left off. For example, those who wanted to move before school starts in the fall aren’t going to wait another year to see what the housing market is going to do.

They’ll rush to showings and try to close on a property, as long as their personal financial situation is stable. We can expect the summer of 2021 to see record activity in the California housing market due to the standard spike in real estate transactions before the school year starts.

On top of this are the young graduates and couples that want to buy their own homes. Plus there will be long-term renters who recognize the opportunity that low mortgage rates represent, searching for homes once they can be pre-approved for a mortgage and visit properties.

There will be a slower economy for a while, but several ongoing trends aren’t going to reverse themselves. Millennials will want to move out of their parent's homes and into their own. We can’t say there will be a coronavirus-led baby boom, but many families having been stuck inside with their kids will decide they want a larger home, yard, or both.

We can talk about the many people who’ve moved out of California to other states. Yet the state continues to attract immigrants from around the world. And young native-born Americans flock here for high-paying jobs, as well. That isn’t going to change due to the virus. Tech giants expanding to Seattle or Portland haven’t relocated their development hubs out of Silicon Valley.

Furthermore, the demand for rentals in the California housing market remains strong. This is why we don’t expect to see a decline in monthly rents, though housing prices may fall significantly before shooting back up. A secondary effect of the coronavirus outbreak is that it has crimped supply chains around the world and slowed down construction.

This will drive up the value of both new and existing properties in the California housing market since the supply of new and redeveloped properties has been stifled. And there is certainly the possibility the California housing market will see bidding wars on the few available and desirable properties by people who have more margin thanks to historically low mortgage rates.

We can expect a few shifts in the California housing market long-term. Realtors will probably continue to utilize 3D virtual tours, using 360 cameras to capture images of every room in the house. This helps them sell the home 24x7x365, whether or not everyone is stuck at home.

While appraisers, stages, and construction crews can’t work remotely, we can expect far more back-office work in the real estate industry to be done remotely because that’s become commonplace. We can also expect online contract reviews and digital signatures to become the norm because it allows real estate transactions to move forward through some of the participants are at home.

Demand for housing was very strong before the coronavirus hit the U.S. This pandemic is not expected to last nearly as long as the United States subprime mortgage crisis, which was a nationwide financial crisis, occurring between 2007 and 2010.

The sharp sales drop in May was the steepest we’ve seen but there are encouraging signs that show the market is recovering and should continue to improve for the remainder of 2020.

Some of the realtors saw no decline in their businesses even during the peak of the pandemic. According to them, the real estate sector was really active even in the pandemic. The way of operating business has changed. People are working from home. They are using applications like FaceTime to show buyers homes instead of traditional open houses.

Lenders experienced a surge in demand as opportunistic buyers move to take advantage of low mortgage rates. Brett Jennings, the founder of Real Estate Experts, writes, “our market is still thriving” in Santa Clara County, seeing only a few cancellations despite shelter-in-place conditions and the fact that “we have one of the highest counts of active COVID-19 cases in California.”

According to Dr. Svenja Gudell, the chief economist of Zillow Group, when they examined pandemic histories ranging from the 1918 flu epidemic to the 2003 SARS outbreak, they noted that economies “snapped back quickly once the epidemic was over.”

Residential real estate is likely to fare far better than the commercial real estate sector. Sometimes, you have to take advantage of these market disruptions to see that many investors will pump the brakes on investing out of fear and other illogical emotional reasons, while others see the opportunity of having access to more real estate inventory, possibly better pricing, and still historically low-interest rates.

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References/Data Sources

• https://www.car.org/
• https://www.car.org/aboutus/mediacenter/newsreleases
• https://www.car.org/marketdata/data/countysalesactivity
• https://www.car.org/marketdata/marketforecast
• https://www.car.org/marketdata/marketminute
• https://www.car.org/marketdata/interactive/housingmarketoverview
• https://www.zillow.com/ca/home-values
• https://lao.ca.gov/LAOEconTax/Article/Detail/265
• https://sf.curbed.com/2020/3/23/21188781/sf-housing-market-coronavirus-covid-19
• https://www.ppic.org/publication/new-patterns-of-immigrant-settlement-in-california
• https://fox40.com/news/business/local-real-estate-market-slows-amid-covid-19-pandemic
• https://www.point2homes.com/news/us-real-estate-news/experts-california-real-estate-2020.html
• https://www.washingtonpost.com/business/2020/02/27/mortgage-rates-head-back-down-coronavirus-fears
• https://www.cnbc.com/2020/03/18/weekly-mortgage-applications-drop-over-8percent-as-interest-rates-jump.html
• https://www.usnews.com/news/business/articles/2020-03-25/business-fallout-companies-in-china-see-delays-in-reopening
• https://www.dallasnews.com/business/real-estate/2020/03/25/homeowners-who-cant-pay-their-mortgages-are-getting-help
• https://www.wfsb.com/news/businesses-considered-essential-under-stay-safe-stay-home-policy/article_53f8e0d0-6d17-11ea-a04d-57ecbb72c518.html

Home prices & sales are rising across the Southern California housing market and San Diego is no exception. In Southern California, the median home price has risen by double digits for eight consecutive months. Homes on the market are selling at a fast pace, often fetching multiple offers well above what the sellers are asking. Homebuyer demand is expected to remain strong this spring, but it will be tested by increasing mortgage rates.

According to a recent report released by C.A.R., the Southern California region remained strong in June 2021 by recording a year-over-year sales growth of 33.9%. As compared to the previous month, the sales grew by almost 11.5%. The median price reached $766,000, which is a gain of 30% over last year and 1.8% over May 2021. The same trend can be seen for San Diego County. In San Diego County, the median home price for single-family homes climbed 27.6% year-over-year to $865,000 while sales were up by 29.2% year-over-year.

But many experts say the factors that have pushed up prices in 2020 will likely continue in 2021 well, especially low inventory. They feel that a shortage of houisng supply, a federal stimulus deal, and the hyper-active summer buying season of 2021 will likely push the home prices up considerably (check the forecast given below). Mortgage interest rates are still low so buyers can afford more than they thought. The housing demand in San Diego has also been driven by the desire for additional space as people spend more time at home.

Inventory is low, prices are rising, and pent-up demand alongside low mortgage rates has the San Diego housing market flooded with homebuyers. June's data by Realtor.com shows that San Diego is a seller’s real estate market. In other words, there are roughly more buyers than there are active homes for sale. The median list price of homes in San Diego, CA was $790K, trending up 10% year-over-year while the median sale price was $800K.

The sale-to-List Price Ratio was 101.78% which shows that homes sold for approximately the asking price on average in June 2021. There are 102 neighborhoods in San Diego. La Jolla has a median listing home price of $2.3M, making it the most expensive neighborhood. Mission Valley is the most affordable neighborhood, with a median listing home price of $500K.

Southern California Housing Market Trends 2021 (Describes June)

Here's how individual counties of Southern California are setting or matching price records as compared to June 2020 (Data released by C.A.R.). San Bernardino County led the pack with the highest price increase of 33.8% over last year. Still, it is the most affordable with a median price of $435,000 for existing single-family homes. Orange County is the most expensive real estate market in Southern California. In all the counties, sales and prices have shown double-digit gains.

• In Los Angeles County, the median price rose 28.5% to $796,120 in June, while sales increased by 42.4%.
• In Orange County, the median price rose 30.8% in June to $1,138,000, while sales increased by 61.6%.
• In Riverside County, the median price rose 27.8% to $575,000, while sales increased by 17%.
• In San Bernardino County, the median price rose 33.8% to $435,000, while sales increased by 17%.
• In San Diego County, the median price rose 27.6% to $865,000, while sales increased by 29.2%.
• In Ventura County, the median price rose 20% to $840,000, while sales increased by 40.7%.

San Diego County Housing Market Trends

San Diego County median home price has topped the $850K mark. The current median price holds at $865,000, which is a gain of 27.6% over last year and 1.6% over May, according to C.A.R.'s June 2021 resale housing report. The report also shows that existing single-family home sales grew by 16% MTM, and are up 29.2% over last year. San Deigo's condo market saw a sharp increase in the median price as compared to last year. The condo's median price is at $550,000 with a gain of 1.4% MTM.

But this price point is up 22.2% from one year ago. Months Supply of existing single-family homes is very tight, currently holding at 1.5 months. It is a good indicator of whether a particular real estate market is favoring buyers or sellers. Typically, a market is considered balanced if it has 4 to 6 months of inventory of homes on hand. A lower number means that buyers are dominating the San Diego housing market and there are relatively few sellers.

Is it a good time to buy a house in San Diego?

Mortgage rates are still low as compared to last year. The 30-Year Fixed-Rate in June 2021 was 2.98% while in June 2020, it was 3.16%. The supply is very tight and with all of these factors considered, at this time, it is unlikely that the San Diego housing market will see a price decline in 2021. So, buyers should act now and take advantage of low mortgage rates before they rise to pre-pandemic levels.

• The median price of a one-bedroom house is $430K. If you put 20% down, monthly payment = $1,940
• The median price of a two-bedroom house is $619K. If you put 20% down, monthly payment = $2,822
• The median price of a four-bedroom house is $1.20M. If you put 20% down, monthly payment = $5,414

Greater San Diego Housing Market Trends

In the Greater San Diego region, June was strong for the housing market, with healthy buyer demand and strong market fundamentals, according to the Greater San Diego Association of REALTORS®. Buyer demand continued largely unyielding in the face of rising home prices and mortgage rates. Existing home sellers and new construction activity continue to remain below the levels necessary to bring the market back into balance, pointing to a busy and competitive buyer market in this peak buying season. Eager home buyers are making several offers, some for far more than the asking price.

The percentage change is shown year-over-year for June 2021.

• Closed Sales increased 20.6 percent for Detached homes and 24.9 percent for Attached homes.
• Pending Sales increased 1.8 percent for Detached homes and 17.3 percent for Attached homes.
• Inventory of Homes for Sale decreased 48.1 percent for Detached homes and 51.8 percent for Attached homes.
• Days on Market decreased 43.3 percent for Detached homes and 43.8 percent for Attached homes.
• Months Supply of Inventory decreased 55.0 percent for Detached homes and 63.6 percent for Attached homes.
• The Median Sales Price was up 29.3 percent to $879,000 for Detached homes and 22.2 percent to $553,500 for Attached homes.

San Diego Housing Market Forecast 2021-2022 (Latest Predictions)

What are the San Diego real estate market predictions for 2021 & 2022? Let us look at the price trends recorded by Zillow (a real estate database company) over the past few years. Since 2012, the typical home value in San Diego has appreciated by nearly 118.75% — ZILLOW HOME VALUE INDEX. ZHVI represents the whole housing stock and not just the homes that list or sell in a given month.

The price of low-tier housing in San Diego County skyrocketed after the latter half of 2012. 2015 experienced another price increase, due to the boost given by decreased mortgage rates throughout 2015 and 2016. San Diego’s high home prices continued to find fuel from increased buyer purchasing power. Although there has been a steady housing price growth from 2012 to 2018 the housing market did cool off from March 2018 till mid-2019. In 2018, home price growth sharply declined in reaction to slowing sales and rising interest rates, which began in late-2017.

The chart clearly shows the flattening of the home price curve in that period. Home prices have since turned back up and the forecast is also positive. The typical value of homes in San Diego City is currently $829,062. It indicates that 50 percent of all housing stock in the area is worth more than $829,062 and 50 percent is worth less (adjusting for seasonal fluctuations). The Zillow Buyer-Seller Index (BSI) currently lists the current market temperature as “hot” in San Diego – which is a sign of a strong seller’s real estate market.

San Diego's home values have gone up 22.5% over the past year. Similar growth has been recorded by NeighborhoodScout.com as their data also shows that in the past ten years, San Diego real estate appreciated by 82.7%. This amounts to an annual real estate appreciation of 6.22%, which puts San Diego in the top 10% nationally for real estate appreciation.

During the latest twelve months, San Diego's appreciation rate has been around 5.88%. In the latest quarter, the appreciation rate has been 1.93%, which annualizes to a rate of 7.95%. Overall, there exists a limited supply of homes in San Diego, and buyers are forced to compete often resulting in higher prices and/or quicker sales that tend to benefit sellers.

San Diego County also comprises the San Diego-Chula Vista-Carlsbad, CA Metropolitan Statistical Area, which is the 17th most populous metropolitan statistical area. The San Diego-Carlsbad, CA Metropolitan Statistical Area is conterminous with San Diego County in Southern California. According to Zillow, the typical value of homes in San Diego-Carlsbad Metro is $774,299. The forecast for 2021 is that the shortage of supply and an increase in the demand for housing from millennials will push the prices higher in the next twelve months.

As of now San Diego home prices have reached the highest level in years and upward pressure is expected to continue into the next year even if there is a marginal increase in homes for sale. The inventory can dwindle in 1.5 months if no homes are listed. Low mortgage rates will bolster the home buying market and continue pushing up home price growth.

• San Diego-Carlsbad Metro home values have gone up 23.3% over the past year and Zillow predicts they will rise 16.8% in the next twelve months.
• San Diego County home values have gone up 23.3% over the past year and will continue to rise at a similar pace in the next twelve months.
• San Diego City home values have gone up 22.5% over the past year and will continue to rise at a similar pace in the next twelve months.

Both home prices and sales have both risen in recent months, despite the turmoil in other areas of the economy. Low inventory and steady demand are two of the key driving factors affecting San Diego’s housing market outlook for 2021. The constraint on available inventory and a decline in new listings is keeping the San Diego housing market skewed to sellers.

The decrease in the number of active listings also indicates that inventory will be very tight over the coming months. It's an opportune time for sellers to list their properties on the market as the sales to list price ratio is almost 100%. However, when you consider the current supply-and-demand situation, it’s easy to see why San Diego's real estate market forecasts are mostly positive for the year 2021.

There aren’t nearly enough homes listed for sale to satisfy the current level of demand from buyers. Despite the COVID19 pandemic, San Diego and the entire metro area market is so hot that it hasn't shifted to a buyer’s real estate market. In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero.

In terms of months of supply, San Diego can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s not going to happen. This housing market is skewed to sellers due to a persistent imbalance in supply and demand.

This is also true across much of Southern California. In fact, the Southern California region was recently singled out as having the steepest decline in housing inventory over the past year or so. It’s a positive sign for homebuyers, especially for those to want to invest in San Diego real estate. For buyers in San Diego, the mortgage rates are still low and the positive forecast for the next twelve months nearly guarantees appreciation.

The US housing market has been heating up with an increase in home-buying activity despite the COVID-19 pandemic. The real estate sector has been one of the most resilient areas of the economy during the severe economic shutdown. While uncertainty remains on the resurgence of COVID-19, the healthy housing demand we see today will create significant tailwinds in the near term.

The chart below, created by Zillow, shows the growth of median home values since 2011 and their forecast until June 2022. 

The historical change in home prices for San Diego-Carlsbad, CA is shown below for the three-time period by “LittleBigHomes.” The San Diego Home Price Index has increased for the last 25 consecutive quarters. The highest annual change in the value of houses in the San Diego Real Estate Market was 32% in the twelve months ended with the 3rd Quarter of 2004.

The worst annual change in home values in the San Diego Market was -20% in the twelve months ended with the 3rd Quarter of 2008. The highest growth in home values in the San Diego Real Estate Market over three years was 88% in the three years ended with the 3rd Quarter of 1979. The worst performance over three years in the San Diego Market was -32% in the three years ended with the 3rd Quarter of 2009.

Time Period	San Diego Metropolitan Area Real Estate Appreciation
Last 5 Years	41%
Last 10 Years	48%
Last 20 Years	205%

Impact of COVID-19 on The San Diego Housing Market

Let’s discuss the impact of COVID-19 on the San Diego housing market. Before the pandemic, the Median Sold Price of Existing Single-Family Homes in San Deigo County for March 2020 was $675,000, which was a year-over-year increase of 8.2%. Compared to the previous month (February), the median sold price increased by 0.7% and home sales increased by a whopping 23.4%. Existing SFR sales in March 2020 were 589, down 5.5% from a year ago. The existing SFR Median Price was $840,000, up 16.7% from a year ago.

As the Covid-19 outbreak went viral in California, home sales were impacted across all the counties due to “shelter at home” restrictions. The shutdown due to the coronavirus pandemic had an impact on California's economy and the real estate sector as well. San Diego home buyers have been praying for a price drop, and they got a decent break during this Covid-19 pandemic.

There has been some short-term impact of the Coronavirus pandemic on the San Diego Housing Market — with buyers withdrawing offers and sellers removing their homes from the market. The general uncertainty played a smaller role in recent weeks. There have been delays in closings due to financing issues as loan funding has slowed down. Sales were down from early April and are still down as compared to last year's numbers. The pandemic, however, has not had much impact on San Diego's home prices yet.

San Diego County home prices grew 1.5% during April and that’s up 7.2% from last year. The median price rose by $10,000 to $670,000 and this is well up from last year the median price of 625,000. In May, San Diego County home prices increased by 0.8% to $655,000 whereas the home sales dropped by a massive 42.3%. Active listings by the end of May were 2,709, a year-over-year drop of 42.7%.

In May, the home sales in all the counties in Southern California, except Ventura, declined 36 percent or more from last year, with San Diego dropping the most at 42.7 percent, according to C.A.R. The median sold price in San Diego County increased by 0.8% to $655,000 as compared to last year. However, when you compare it with April 2020, the price decreased by 2.4%.

In July, home prices in San Diego County blew past previous records to hit an all-time high of $634,000. That represented a 9.3 percent price increase over a year earlier, its highest annual jump in nearly two years. The previous record median price was $600,250 in June.

Prices were up sharply across Southern California as experts pointed to historically low-interest rates and a lack of homes on the market as driving forces — despite a global pandemic and high unemployment. The median price of single-family homes in San Diego County hit a record of $700,000, up to $44,500 from the old record in June.

In August 2020, sales of single-family homes increased by 10.2% y-o-y, affirming that there is a strong demand among homebuyers in the area. Pending sales have also increased over the last 3 months in San Diego County. Home prices across the San Diego metro area are rising steadily in 2020. Due to the pandemic, it was expected that the home prices would remain flat or drop a bit in the coming months to favor buyers. That was a much-awaited condition for homebuyers who cannot afford a home at the median price. But that's not the case.

The median sold price of single-family homes increased by a whopping 12.7% year-over-year to $650,000. Earlier in July, the median price had increased by 10.6%. The San Diego home prices have increased by 6% from June to July of 2020. According to the latest San Diego real estate market update for August 2020, the inventory of single-family homes has dropped 51.2%. That is one reason we see a drop of 2.2% in sales as compared to the previous month (July).

***The latest housing trends have already been discussed above***

San Diego Real Estate Investment: Should You Invest or Not?

Should you consider San Diego real estate investment? Many real estate investors have asked themselves if buying an investment property in San Diego is a good investment? You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers in 2021 or 2022. Although this article alone is not a comprehensive source to make a final investment decision for San Diego, we have collected ten evidence-based positive things for those who are keen to invest in San Diego real estate now.

Let’s look at the state of the San Diego real estate market and the factors driving the property market short and long term. Affordability has become an issue for many homebuyers in the San Diego area. This is another housing market trend that is affecting many major cities across the country but particularly in the western coastal markets. How big is San Deigo's housing market? San Diego is a moderately walkable city in San Diego County with a population of approximately 1,305,700 people.

It is the second biggest California city and one of the ten biggest cities in the country. San Diego is one of the fastest-growing cities in the U.S, and its economy is strong. San Diego is often overlooked in favor of hotter real estate markets like San Francisco and Los Angeles. However, that’s one of the reasons why you should consider investing in the San Diego real estate market. The city of San Diego continues to outpace California's job recovery, which is good news for San Diego’s housing industry.

The San Diego metropolitan area is known as the birthplace of naval aviation, serving as a major employment center in the nation for defense and in the Southern California region for scientific research, health care, education, trade, and tourism. The significant military presence supports hundreds of thousands of jobs, pays billions of dollars in wages, and has an overall annual economic impact on the San Diego metropolitan area of billions of dollars.

San Diego's housing market remains one of the hottest in the nation (ranked 10th by Zillow). Since home building takes time especially in a heavily regulated environment, there’s little chance of diminished demand. San Diego has been one of the hottest real estate markets in the country for many years. During the 20 years from 1998 to 2018, the median home value in San Diego rose by a whopping 217%. But the median household income only rose by around 77% during that same 20-year time frame.

San Diego has a mixture of owner-occupied and renter-occupied housing. As per Neigborhoodscout.com, a real estate data provider, one and two-bedroom single-family detached are the most common housing units in San Diego. Other housing types prevalent in San Diego include large apartment complexes, duplexes, rowhouses, and homes converted to apartments.

There were 4,100 single-family homes and 6,400 multi-family homes built in 2017, compared to 2,200 single-family homes and 7,800 multi-family units in 2016. Today, the general trend for SFR construction in San Diego County is still far below the 2002-2004 numbers. The next peak in single-family residential construction will likely begin around 2021, but it is doubtful to return to the frenzied mortgage-driven numbers seen during the Millennium Boom.

The San Diego Housing Market Is a Relative Bargain

California is known for its insane real estate prices. San Diego stands out as a relatively affordable real estate market. The median home price is around $550,000. This sounds bad if you compare it to the national average of $300,000, but it is a bargain in California. You could snap up several San Diego rental properties for the price of one home in San Francisco.

The San Diego housing market is cooling. Home price appreciation fell below 5%, and home prices in some areas are declining due to decreasing demand. This is an improvement over the 6 to 8% appreciation San Diego had been seeing. The expanding inventory of houses on the market makes this a great time to invest in the San Diego housing market.

San Diego's Housing Supply Is Constrained As New Construction of Homes is Quite Slow

San Diego is a growing housing market. By 2050, the population of San Diego County is expected to grow to 4.5 million, approximately a 50% increase from the population in early 2007 of 3,098,269 people. Population trends have connections with housing trends as it increases the demand for housing supply. However, construction in San Diego has stalled. Single-family residential construction is well below the demand for such homes in the San Diego housing market.

There has been faster growth in the construction of multi-family housing in the San Diego real estate market, but that is also below historic rates. Currently, both single-family and multi-family housing construction is increasing in San Diego. Even though there are more multi-family starts over single-family homes in terms of raw numbers, the percentage of single-family homes being constructed outpaces that of multi-family units.

San Diego also shares several geographic constraints that other California coastal cities do. You can’t build on water. The Cowles Mountains limit how much the city can expand inland, constraining the housing supply. Regulations limit high-density construction, preventing the area from meeting demand with too many tall condo towers. So, do the wilderness areas off-limits to construction like Cuyamaca Rancho State Park and Cleveland National Forest.

The Diverse Student Market Feeds the San Diego Rental Market

San Diego is a major metropolitan area, and it is home to several colleges and universities. The University of California at San Diego is one of the largest. It is sometimes confused with San Diego State University, a different campus, and the University of San Diego. Point Loma Nazarene University is a Christian school in San Diego. National University is located in nearby La Jolla.

Smaller schools like the Art Institute, Alliant International University, Azusa Pacific University, Brandman University, Miramar College, Mesa College, and California College of San Diego fill out the San Diego real estate market.

A side benefit of the diversified student market is that you can buy multiple properties across the San Diego housing market and enjoy a “diverse” investment portfolio. You won’t see demand for the property rise and fall based on the popularity of a flagship school, and the strong San Diego housing market allows you to rent it to newcomers to the area or military officers if you can’t fill the unit with students.

San Diego’s economy isn’t as reliant on tourism as other coastal towns. Instead, defense and the military are a larger part of the local economy. This dumps tens of thousands of renters into the San Diego real estate market who will never buy because they could be deployed elsewhere in a year or two. The military also gives generous allowances for those who rent San Diego rental properties, keeping rents near the military base strong regardless of the state of the economy.

San Diego Rental Prices Are Increasing Year-Over-Year

The San Diego real estate market has been ranked among the ten most expensive real estate markets in the country, though it ranks below several other West Coast cities. This creates massive demand for San Diego rental properties by those who simply cannot afford to buy homes. The rental market will continue to grow as the city grows an estimated 500,000 population by 2050, adding tens of thousands each year. The median rent in San Diego is $2700. The rent you’d receive on single-family San Diego rental properties would, of course, be much higher.

If you find a good bargain and make it family-friendly, you could charge well over $3000 a month. If you can convert San Diego rental properties into smaller units, you’d receive around $2200 a month for a one or two-bedroom apartment. The cash on cash returns for properties in the San Diego housing market is around 2.5% for traditional rental properties and nearly 2% if you rent on Airbnb. The fact that the city isn’t too dependent on tourism means you could rent properties on the beach to newcomers, locals, and students if tourism is slow.

Before the pandemic, the average rent for an apartment in San Diego had been growing at 4% year-over-year (source: RentCafe). About 40% of the apartments can be rented for less than $2000, and 60% of the apartments can be rented for more than $2,000 per month. This shows that rent prices are very high in San Diego.

Homeowners vs Renters Statistics: According to the most recent 2020 American Community Survey census data, San Diego County has a renter percentage of 46.7% which is the second most renter percentage of all the counties in the greater San Diego County region. The homeowner percentage is 53.3%. The monthly cost of ownership for property owners in San Deigo is around $2,073.

The median gross rent is $1,658, which is the third most expensive among all other counties in the greater San Diego County region. Comparing rental rates to the United States average of $1,062, San Diego County is 56.1% larger. Also, compared to the state of California ($1,503), San Diego County is 10.3% larger.

Rental Trends: As of July 26, 2021, the average rent for a 1-bedroom apartment in San Diego, CA is currently $1,975. This is an 11% increase compared to the previous year. Over the past month, the average rent for a studio apartment in San Diego increased by 6% to $1,695. The average rent for a 1-bedroom apartment increased by 4% to $1,975, and the average rent for a 2-bedroom apartment increased by 6% to $2,695.

• Two-bedroom apartment rents average $2,695 (a 17% increase from last year).
• Three-bedroom apartment rents average $3,400 (a 7% increase from last year).
• Four-bedroom apartment rents average $4,200 (an 8% increase from last year).

San Diego Real Estate Market Is More Landlord Friendly For Short Term Rentals

We can’t say that California is landlord-friendly. However, specific cities are better for landlords and real estate investors than others. One reason to invest in the San Diego housing market over San Francisco or Los Angeles is the fact that San Diego is one of the few big cities that doesn’t have rent control. The city has groups fighting proposals to apply rent control to San Diego rental properties in addition to apartments.

San Diego has many tourist attractions. Balboa Park is home to the San Diego Zoo, the Air and Space Museum, the Natural History Museum, the Desert Garden, the local youth Symphony, a Japanese garden, and a golf complex. There’s a SeaWorld in San Diego, an MLB stadium, the USS Midway Museum, and the San Diego zoo safari park. On top of this is the mild weather and proximity to the beach. Any San Diego rental properties in easy reach of these attractions command a premium on rental sites like Airbnb.

Demand for rentals in the San Diego real estate market soars during Comic-Con, one of the biggest comic conventions in the country. The only limit on San Diego rental properties has been the fluctuating rules by the city council, such as a measure passed limiting rentals to primary residences that were rescinded a few months later in 2018. Yet permission for rentals is limited in many master-planned communities and condo developments, keeping rents for Airbnb and other short-term rentals strong.

San Diego Is A Great Place Place To Live In 

San Diego is a great place to live in which makes real estate investment a lucrative opportunity. It has nice sunny weather and impressive beaches. It has more than 300 parks, including Mission Trails Regional Park, and 40,000 acres of undeveloped open space. Balboa Park has the world-famous San Diego Zoo, Old Globe Theatre, and museums. San Diego Zoo is also one of the prettiest zoos in the world to walk around. U.S. News analyzed 125 metro areas in the United States to find the best places to live based on the quality of life and the job market in each metro area, as well as the value of living there and people's desire to live there.

San Diego, California was ranked:

• #36 in Best Places to Live
• #51 in Best Places to Retire
• #3 in Best Places to Live in California
• #5 in Most Expensive Places to Live
• #9 in Best Places to Live for Quality of Life
• #12 in Safest Places to Live

San Diego is home attracts millennials with its higher education opportunities and big-city amenities such as excellent restaurants, dive bars or clubs, and great nightlife. The craft beer scene in San Diego is one of the best in the world. North County is desirable for young families whereas millennials are moving downtown and to communities to the northeast as a result of gentrification and the diverse entertainment options centralized in those areas.

Where To Invest In San Diego Real Estate Market?

Are you looking for an investment property in the San Diego real estate market? Maybe you have done a bit of real estate investing in San Diego but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. San Diego offers an ideal mix of limited supply, high demand, and excellent income potential.

San Diego's mild climate, miles of beaches, fun attractions, and great schools make the city one of America's best places to live. If you’re going to invest in California, it needs to be in San Diego. Good cash flow from San Diego investment properties means the investment is, needless to say, profitable. On the other hand, a bad cash flow means you won’t have money on hand to repay your debt.

Therefore, finding the best investment property in San Diego in a growing neighborhood would be key to your success. The three most important factors when buying real estate anywhere are location, location, and location. The location creates desirability. Desirability brings demand. You should focus on neighborhoods with relatively high population density and employment growth.

Both of them translate into high demand for housing. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your San Diego rental property and you should be able to get a good return on your investment over the long term.

The neighborhoods in San Diego must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. A cheaper neighborhood in San Diego might not be the best place to live in.

A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals in Class A neighborhoods. The inventory is low, but opportunities are there.

Some of the popular neighborhoods in or around San Diego are Carmel Valley, Rancho Bernardo, Point Loma, Pacific Beach, Mission Valley, Mira Mesa, Rancho Penasquitos, Bonita, Del Cerro, North Park, La Jolla, 4s Ranch, Mission Hills, Otay Ranch and Rancho Santa Fe.

As we write this, the asking price of single-family homes for sale in San Diego (on Realtor.com) starts from $132,000 for a 3-bedroom house and can go up to $37M for a luxury 10-bedroom house located in the Northern San Diego neighborhood.

You can get a beautiful 3-bedroom new construction single-family house for around $379,000 in the Southern San Diego neighborhood — which is quite an affordable entry price as San Deigo home prices are some of the most expensive in all of the United States.

Here are some of the best neighborhoods in San Diego where you can buy an investment property.

Encanto is one of San Diego’s most affordable neighborhoods if you want to buy an investment property. According to Neighborhood Scout Encanto’s median real estate price is $405,140, which is cheaper than 69.5% of California homes. Encanto is a hilly neighborhood located in the southeastern part of San Diego, California. The neighborhood of Encanto is split into two sections, North Encanto (which lies north of Broadway), and South Encanto (which lies south of Broadway).

The name Encanto usually refers to the neighborhood of Encanto, but it can also refer collectively to the neighborhoods of the Chollas Valley planning area, which consists of Chollas View, O'Farrell, Lincoln Park, Emerald Hills, Valencia Park, Broadway Heights, Alta Vista, Rosemont, as well as Encanto. The citizens' community planning group that represents these eight neighborhoods in accordance with the City of San Diego Council Policy 600-24 is named the Chollas Valley Community Planning Group.

The Encanto Neighborhoods Community Plan is designed to expand the existing retail, commercial and light industrial areas along the main transportation corridors and the villages surrounding the trolley stops at 47th and Market streets, and Euclid Avenue and Market Street. Its cultural heart is the Market Street Village, situated along Chollas Creek, and the trolley stop at the intersection of Euclid Avenue and Market Street.

With its proximity to San Diego Bay just 2 1/2 to 5 miles away, temperatures tend to be mild. The area offers excellent opportunities for infill development, including commercial, transit-oriented mixed-use along the main corridors, and view lots for single-family residential in the surrounding hills.

Nestor is another relatively affordable neighborhood in San Deigo having a median real estate price of $500,280, which is less expensive than 60% of the neighborhoods in California. The average rental price in Nestor is currently $1,788, based on NeighborhoodScout's exclusive analysis. Rents here are currently lower in price than 68.1% of California neighborhoods. Nestor is a residential neighborhood in the southern section of San Diego, and part of the Otay Mesa-Nestor community planning area. Zillow predicts that home values in Nestor would increase by 4.6% in the next 12 months.

It neighbors Palm City and Otay Mesa West to the east, Egger Highlands to the north, San Ysidro to the southeast, and the Tijuana River Valley to the south. Major thoroughfares include Coronado Avenue, Saturn Boulevard, Hollister Street, and Tocayo Avenue. According to Areavibes.com, the cost of living in Nestor is 19% lower than the San Diego average and 13% higher than the national average. On their livability index, it ranks better than 42% of areas in San Diego.

The Otay Mesa-Nestor community planning area is located in the southern region of the City and is bounded on the north by Chula Vista, on the east by the community of Otay Mesa, on the south by the Tijuana River Valley and the San Ysidro community, and on the west by Imperial Beach. Twenty percent of the planning area consists of schools, parks, transit, and other public facilities, while vacant, undeveloped, agricultural, and mineral extraction and processing uses comprise the remaining 15 percent.

Emerald Hills is a fairly good neighborhood in San Diego to invest in real estate. It is a calm neighborhood with many green spaces nearby for residents to visit. Most areas in this neighborhood are quiet, as noise from the streets and other parts of the city is rarely an issue. It is bordered by Oak Park and California State Route 94 on the north, Chollas View and Euclid Avenue on the west, Encanto on the east, and Valencia Park and Market Street on the south. Major thoroughfares include Kelton Road and Roswell Street.

Most houses for sale in this neighborhood are located in places that are not very suitable for walking since carrying out daily needs is sometimes difficult. The Median Home Value in Emerald Hills is $418,600 and Zillow predicts a rise of 4.2% in the next twelve months.

Another urban area that is great for investment is the Downtown/City Center. It is one of the best places to live in California. It offers residents a dense urban feel and more than 70% of the residents rent their homes. So it is a great neighborhood to buy rental properties due to high demand. Downtown's public schools are above average.

The Median Home Value in Downtown is $572,100 and Zillow predicts an increase of 4.5% in the next twelve months. The median rent is around $1,491. It offers good nightlife with restaurants, bars, and entertainment venues. Niche.com ranks it #25 among the best neighborhoods to live in San Diego.

10 Highest Appreciating San Diego Neighborhoods Since 2000 (List by Neighborhoodscout.com)

1. Main St / S 32nd St
2. National Ave / Sampson St
3. Ocean View Blvd / S 45th St
4. S 32nd St / National Ave
5. S 45th St / Logan Ave
6. Guadalcanal Ave / Henderson Ave
7. Park Blvd / Presidents Way
8. Near Harbor Island Dr
9. Fairmount Ave / Polk Ave
10. Ocean View Blvd / S 38th St

The cheapest or most affordable neighborhoods to rent in San Diego are Alta Vista, where the average rent goes for $975/month, Broadway Heights, where renters pay $975/mo on average, Emerald Hills, where the average rent goes for $975/mo, City Heights East, where renters pay $975/mo on average $1,383, Darnall with an average rent of $1,439, and Rolando, where the average rent price is 1,484.

Apart from San Deigo, you can also invest in several other real estate markets in California. California has the 6th largest economy in the entire world. This is largely driven by its innovative production, the heavy tech sectors in the state, and more. Apart from the San Diego real estate market, you can also invest in another hot market in San Jose. San Jose is part of Silicon Valley, a place where $100,000 a year or higher salaries from competing for tech firms has driven up the cost of real estate.

But what about the San Jose housing market itself? San Jose is the third-largest city in California, home to roughly a million people. It has the highest cost of living in any area in the U.S., and it is one of the most expensive housing markets in the country. If you want to invest in San Jose real estate, you may not need to buy and renovate. Instead, if you know of industrial or commercial properties near major employers they may need to convert to employee housing, which you could buy now and hold until it sells.

If that doesn’t happen, you could still turn it into a co-working space. In January 2018, Redfin ranked the ten hottest neighborhoods in the United States. Nine of the ten were in San Jose. When single home prices fall from 1.2 million to 1 million, homes now sit on the market for several days instead of being snapped up immediately.

The other good place for real estate investment in California is Sacramento. Sacramento is an island of sanity in an overpriced, over-regulated, and overheated West Coast housing market. It reflects the California ideal that most of the state has lost, and that’s we recommend it to investors over the “hotter” California metro areas. These are the same factors causing many Californians themselves to vote with their feet and move here instead of moving out of the state altogether.

If you’re considering Sacramento real estate investment, the diverse rental market is a definite plus. Being a state capital, it is home to several universities. This allows you to rent to the relatively large student market in addition to the local population. There is, of course, the University of California campus in Sacramento, but you could own investment properties by American River College and other, smaller schools in the area, too.

Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.

NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment properties.

Not just limited to San Diego or California but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience with our team to see if San Diego makes sense as a place to invest today.

We can help build you a custom portfolio of turnkey properties located in some of the best markets in the United States. By researching and structuring complete turnkey real estate investments, we can help you succeed by minimizing risk and maximizing profitability.

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Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.

References:

Latest Market Data, Trends, and Forecasts
https://www.car.org/
https://www.car.org/marketdata/data/countysalesactivity
https://www.sdar.com/press-releases.html
https://www.zillow.com/SanDiego-ca/home-values
https://www.neighborhoodscout.com/ca/san-diego/real-estate
https://www.realtor.com/realestateandhomes-search/San-Diego_CA/overview
https://www.sandiegorealestatehunter.com/blog/san-diego-real-estate-market-forecast
http://www.homebuyinginstitute.com/news/san-diego-more-moderate-forecast
https://www.zillow.com/research/2020-hot-markets-south-26293/
https://journal.firsttuesday.us/san-diego-housing-indicators-2/29246/

California COVID-19 Economic/Market Update
https://car.sharefile.com/share/view/s2a8899fc081428a8

Cooling market
https://www.10news.com/news/making-it-in-san-diego/making-it-in-san-diego-slowing-housing-market-could-create-buying-opportunity

New housing supply
https://journal.firsttuesday.us/san-diego-housing-indicators-2/29246

Relatively cheap market
https://www.cnbc.com/2019/02/27/spring-housing-market-could-be-coolest-in-recent-years-realtorcom.html
https://www.sandiegouniontribune.com/business/real-estate/sd-fi-corelogic-home-20180724-story.html

Rental rates
https://www.rentcafe.com/average-rent-market-trends/us/ca/san-diego
http://worldpopulationreview.com/us-cities/san-diego-population

Landlord friendly
https://www.sandiegouniontribune.com/business/real-estate/sd-fi-rent-control-20180703-story.html

Short term rentals
https://www.mashvisor.com/blog/airbnb-san-diego
https://www.sandiegoreader.com/news/2018/mar/07/city-lights-airbnb-forcing-you-out
https://www.sandiegouniontribune.com/business/tourism/sd-fi-airbnb-regulations-council-20181022-story.html

College market
https://www.niche.com/colleges/search/best-colleges/m/san-diego-metro-area

Foreclosures
https://www.realtytrac.com/statsandtrends/ca/san-diego-county/san-diego

General stats
http://worldpopulationreview.com/us-cities/san-diego-population
https://www.sandiego.org/articles/east-county/san-diego-east-mountains.aspx

This page has been updated to reflect the most recent trends in the San Francisco Bay Area housing market. The real estate market in the Bay Area is growing, with the median price topping $1 million for the fourth month in a row. Demand outstripped supply in June, resulting in homes selling at an exceptionally quick rate. The Bay Area housing market is distinguished by high demand, cheap mortgage rates, and a scarcity of available inventory. Due to increased demand from the state's high-income residents who can take advantage of low-interest mortgage rates, home prices are skyrocketing.

According to current trends, housing prices in the majority of Bay Area communities will continue to climb until 2022. A significant number of purchasers led home prices to increase over the previous year in June 2021. The median sales price of this region, which includes all nine counties of Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma, was $1,350,000 ($729 per Sq Ft). According to C.A.R., this is a 35% increase over last June. It was the highest year-over-year gain in California. Bay Area house prices were also slightly up by 0.7% from the previous month. Sales of existing homes were up throughout California's housing market.

Single-family housing sales in the San Francisco Bay Area grew by double digits (34.1 percent) over the previous year, with seven of the region's nine counties also increasing by double digits. The inventory is quite low. As of June 2021, the months of supply for existing single-family houses has fallen to 1.4 months. For buyers (who didn’t lose a job) low-interest rates are making buying a home hard to resist.

Homes are selling for more than the asking price because new home buyers are ready to spend more in order to win bids. Only those who do not have enough money for a down payment are delaying their purchases. Looking at the low supply of homes, interested investors may have a difficult time finding available properties in the Bay Area. Nine out of ten Bay Area counties posted double-digit gains in the home prices as compared to last year except for San Francisco, which had the smallest price growth of 8.0%.

Buyers in suburban areas like Santa Clara, San Mateo, and Contra Costa counties appear to be searching for more room in their houses, which is driving up median home prices. Although home prices grew in all the counties five counties posted annual growth of more than 20%. Alameda county topped the list with a price growth of 33.2% as compared to last year. It was followed by Contra Costa (31.9%), Napa (31.8%), San Mateo (31.1%), Santa Clara (26.6%).

Sales Price to List Price Ratio in Bay Area was 109.9% in June signaling a very competitive market. Anything over 100% gives sellers an upper hand in price negotiations. The housing supply remains tight. The unsold inventory index now sits at 1.4 months, which means it would take less than six weeks to squeeze away all the listings from the market at the current sales pace. Months of supply has seen a sharp decline from last June when it was 2.3 months.

Bay Area Housing Market Trends 2o21 (Describes June)

Below is the latest tabulated housing market report for the entire Bay Area release by the California Association of Realtors. The tabulated report shows the sales and prices of the Bay Area counties for June 2021. Much of the Bay Area real estate market remains firmly in “seller's market” territory with months of supply of available single-family homes being 1.4.

San Francisco (County) Housing Market Trends 2021 (Resales | Rents | Condos)

Tech hubs like San Francisco and San Jose have drawn substantial homebuyer demand over the years but San Francisco’s infamously hot real estate market saw an outward migration due to the pandemic. People were leaving the city, increasing demand in the suburbs. The value of suburban single-family homes is skyrocketing, while rents and pricing in tech hubs are falling. Recent market trends indicate that the market is reviving and will most likely heat up again in the coming months.

• In June, the existing single-family home sales growth was strong in SF county.
• The closed sales were up by 87.1% from the previous year, according to C.A.R.
• The median price for a single-family home in San Francisco County was $1,950,000 in June, up 8% YTY and 2.6% MTM.

The number of active listings in San Francisco peaked in August of last year, reaching a four-year high. In August, the median listing price of a San Francisco home was less than $1.4 million, the lowest since February 2019. Many real estate agents believe that the San Francisco housing market has begun to cool, even though demand remains strong in suburban neighborhoods. The pandemic has accelerated migration out of large cities, and it seems like most of the movement is going to be a permanent one.

In California, San Francisco and Los Angeles are the top markets for outward migration, for both permanent and temporary moves during the pandemic. San Franciso has also seen significant rent declines (down nearly 23% from last year). Rents and condominium prices are expected to remain lower until 2022, according to most analysts, although single-family house prices will be less affected. Lesser-known areas with greater space, such as the Richmond, Sunset, and West Portal, are becoming increasingly popular.

Rents were falling in many major cities across the country due to the pandemic, but the drop was most pronounced in San Francisco, one of the nation's priciest housing markets. Housing markets like San Francisco, Santa Clara, Boston, Seattle, and others, have seen rents decline by double digits since the onset of the pandemic. Studio rents have been falling on a year-over-year basis since March when the pandemic led to lockdowns but it took until May for rents to begin falling for one and two-bedroom units.

In March 2020, just before the pandemic fully impacted the housing market, rents in tech cities were growing 2.8% year-over-year. Nearly a year later, in February, tech cities saw rent growth hit its lowest point. According to Realtor.com, as of June 2021, rents have fully recovered in many of the nation’s largest cities, and are on track to speedy recovery in many others. Monthly rentals in metropolitan tech areas began to turn the corner in April, moving away from the sharp falls of the previous year and toward a path of recovery.

June's data not only confirms this pattern in tech centers but also shows a return to growth rates before COVID. Rents across the country reached new highs in June. In 44 of the 50 largest metro areas, rents reached their highest levels on record, and are growing faster than ever. In 6 of the 50 largest markets, typically the densest areas with big tech industries, rents still lagged behind historical peaks. The difference between current rents and prior peaks shows that the largest markets and Bay Area tech hubs still have the most ground to make up, albeit the gap is closing.

The Bay Area continues to see an accelerating rate of rent growth, suggesting that the signals of a rebound from earlier this year are now a trend that’s likely to continue. San Francisco posted the largest median one-bedroom monthly gain among the three major Bay cities at 5.3 percent (source: Zumper).

On a quarterly basis, it’s clear that the Bay Area has turned a corner. After four quarters of sharp drops in rent, each of its three major cities saw rents rise in Q2 of 2021 compared to Q1, including a 5.3 percent increase for San Francisco. With life in the Bay Area getting back to “normal,” there is no reason to think this won’t continue in the near term. This growing tendency implies that people are willing to return to big cities, and it could indicate that workers are returning to these locations.

San Francisco has seen some of the biggest pandemic-related disruptions, and rents still need to grow another 9 to 12% to reach a new record level. As of July 24, 2021, the average rent for a 1-bedroom apartment in San Francisco, CA is $2,700. This is a 16% decrease compared to the previous year. Over the past month, the average rent for a studio apartment in San Francisco increased by 1% to $1,950. The average rent for a 1-bedroom apartment increased by 2% to $2,700, and the average rent for a 2-bedroom apartment increased by 3% to $3,790.

• The average rent for a studio apartment in San Francisco, CA is currently $1,950. This is a 15% decrease compared to the previous year.
• The average rent for a 2-bedroom apartment in San Francisco, CA is currently $3,790. This is a 9% decrease compared to the previous year.
• The average rent for a 3-bedroom apartment in San Francisco, CA is currently $4,500. This is a 12% decrease compared to the previous year.
• The average rent for a 4-bedroom apartment in San Francisco, CA is currently $5,900. This is a 9% decrease compared to the previous year.

San Francisco Condo Sales Data & Trends

The high inventory levels for condos and townhomes in San Francisco county have made it favorable for condo buyers. The current unsold cond inventory index is 2.1 months and the sustained oversupply is finally lowering median prices of condos. People simply no longer wish to live in densely populated areas, especially apartment buildings where they have to share common areas. They want enough space for a home office or two and their own outdoor space as well.

The current median price for a San Francisco condo is $1,250,000, which is only 1% more than June of last year. The good thing for SF condos was that lower prices were driving more sales. Condo sales in SF county have increased by a whopping 216.2% as compared to June of last year. Similar growth was seen in the previous month as well (367.4% year-over-year).

Such massive annual growth shows that condo sales are going extremely strong. There is a consistent demand for condos as the month-to-month sales growth is also doing good with an increase of 7.9%. Higher levels of inventory, following a flood of new listings during the pandemic, are sitting on the market in the city proper, a significantly larger jump than the surrounding suburbs. In San Francisco, though, the softening is clear as sellers flood the market with their listings and buyers have not changed their pace to match.

San Francisco had an unusually low inventory relative to other large cities before the pandemic. You can expect more condo listings and prices could come down, even more in 2021. It could be an opportunity for those that have been wanting to buy a condo for a while and were previously priced out.

San Francisco Bay Area Housing Market Forecast 2021-2022

San Francisco's real estate market is shaping up to continue the trend of the last few years as one of the hottest markets in California. What are the San Francisco real estate market predictions for 2021 & 2022? Let us look at the price trends recorded by Zillow over the past few years. Since 2012, the San Francisco home values have appreciated by nearly 98.8% — Zillow Home Value Index.

As you can see in the graph given below, the San Francisco & Bay Area home values increased consistently, from 2012 through 2018. After that, it marked the beginning of a flattening out of prices which lasted for over a year. ZHVI is not the median price of homes that are sold in a month within a geographic region.

It is calculated by taking all estimated home values for a given region and month (Also called Zestimates), taking a median of those values, applying some adjustments to account for seasonality or errors in individual home estimates. It, therefore, represents the whole housing stock and not just the homes that list or sell in a given month.

By this calculation, the current typical home value of homes in San Francisco is $1,453,455. It indicates that 50 percent of all housing stock in the area is worth more than $1,453,455 and 50 percent is worth less (adjusting for seasonal fluctuations and only includes the middle price tier of homes).

In May 2020, the typical value of homes in San Francisco was around $1.49 million. Home values have declined -2.8% over the last twelve months. The typical value of homes in San Francisco-Oakland-Hayward Metro (Bay Area) is $1,235,705 and home values have gone up 7.4% over the past year.

Here are Zillow's latest home price projections for the Bay Area and its counties. The exact rate of appreciation for the counties for the next twelve months is not available as we write this. However, you can gauge it by looking at the past trends shown in the graph. Due to supply-demand imbalance, property appreciation is certain in 2021.

If mortgage rates remain lower than last year's average, it can play an important role in the price growth. For current homeowners and those looking to sell, there is a lot of money to be made as housing prices have increased in all the counties.

• Bay Area (San Francisco-Oakland-Hayward Metro) home values have gone up 7.4% over the past year and Zillow predicts they will rise 14.1% in the next twelve months.
• San Francisco home values declined 2.6% over the past year but they are expected to increase in the next twelve months.
• Alameda County home values have gone up 14% over the past year and they will continue to rise in the next twelve months.
• Contra Costa County home values have gone up 14.3% over the past year and they will continue to rise at a similar pace in the next twelve months.
• Marin County home values have gone up 11.4% over the past year and they will continue to rise at a similar pace in the next twelve months.
• Napa County home values have gone up 13.9% over the past year and they will continue to rise at a similar pace in the next twelve months.
• San Mateo home values have gone up only 2.1% over the past year and they are expected to rise at a faster pace in the next twelve months.
• Santa Clara home values have gone up 5.9% over the past year and they will continue to rise at a similar pace in the next twelve months.
• Solano County home values have gone up 12.1% over the past year and they will continue to rise at a similar pace in the next twelve months.
• Sonoma County home values have gone up 9.5% over the past year and they are expected to rise at a similar pace in the next twelve months.

Here is the graphical representation of historical home prices in this region and their forecast until April 2022.

The change in home prices for San Francisco-Redwood City-South San Francisco, CA is shown below for the three time periods by LittleBigHomes.com (up to 3rd Quarter, of 2018). The San Francisco Home Price Index has increased for the last 26 consecutive quarters. The all-time high in the San Francisco Home Price Index was 489.9 in the 3rd Quarter, of 2018. The Home Price Index indicates that the San Francisco Market is up 81% over the last 10 years.

Over the last thirty years, it is up 435%. The highest annual change in the value of houses in the San Francisco Real Estate Market was 28% in the twelve months ended with the 4th Quarter of 1979. The worst annual change in home values in the San Francisco Market was -12% in the twelve months ended with the 3rd Quarter of 2008.

Time Period	San Francisco Real Estate Appreciation
Last 5 Years	68%
Last 10 Years	81%
Last 20 Years	289%

There has been a short-term impact of the Coronavirus pandemic on the Bay Area Housing Market—buyers withdrawing offers and sellers removing their homes from the market. The general uncertainty is playing a smaller role in recent weeks. Sales were down 28% from early March, statewide. According to the California Association of Realtors, there has been the biggest drop in housing starts in 1984.

The pandemic, however, has not had much impact on prices yet. The buyer demand has significantly rebounded as is reflected in June's housing data. Despite high rates of unemployment and an economic downturn, housing has held onto its value in the San Francisco Bay Area. As the Bay Area employs a high number of skilled workers with college degrees, its unemployment rate is lower than other areas of the United States, and its housing market is holding strong.

The high-end buyer activity has pushed the median price to an all-time high. More affluent buyers having the greatest financial resources have been jumping back into the market to a greater degree than other segments. Nationally, the showing activity has notably increased from the depressed levels in recent months, reflecting pent-up demand by prospective home buyers. The fall season has become as active as the summer buying season.

Despite the ongoing health and economic crisis precipitated by COVID-19, the SF Bay Area real estate market made a large recovery from the steep declines in March and April. SF median house sales prices are as high as they’ve ever been. The median condo sales price has also been running higher than the highs of last year. It recorded an increase of 17.7% YTY in June 2021. Condo sales are surged by 106.7% YTY. The condo market is seeing growth in new listings, especially in San Francisco County, where we're seeing a softening of prices. While the annual price growth was only 1% in June, the condo sales posted a growth of 216.2% from a year ago.

In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, San Francisco, or the entire Bay Area housing market can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s not going to happen.

Because of a persistent imbalance in supply and demand, the entire Bay Area region is heavily skewed toward sellers. In June, the inventory of available single-family homes remained at 1.4 months, indicating that buyer demand had risen to a new high. This will cause property prices to rise at a moderate rate in the coming months. The supply of listings in San Francisco County was at its highest point in 8 years in August 2020. Correct pricing becomes increasingly important for sellers as the market softens. When this occurs, the sellers will be forced to compete for buyers.

The good news for buyers in San Francisco and the rest of the Bay Area is that mortgage rates are still low (around 3.0 percent) when compared to last year's average rate. As a result, now is a good time for them to enter the market and seize their favorite deals, as rising San Francisco home prices have reduced housing affordability.

Real estate market forecasts given in this article are just an educated guess and should not be considered financial advice. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control. Many variables could potentially impact the value of a home in San Francisco in 2021 (or any other market) such as big changes in the distressed, new-construction, or luxury home segments. There are also a wide variety of economic and political factors that can and do impact real estate markets. Most of these variables are difficult to predict in advance. 

Impact of Pandemic on The Bay Area Housing Market (Summary)

San Francisco Bay Area consistently ranks among the most expensive real estate markets in the world, and it is one of the most densely populated cities in the U.S. The Bay Area housing market consists of all nine counties (Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma) and 101 municipalities. The region is home to three major cities: San Francisco, Oakland, and, the largest, San Jose.

Despite the ongoing health and economic crisis caused by the COVID-19 pandemic, the San Francisco housing market made a large recovery in sales from the steep declines in March and April. The median sold price hit a new monthly high in June ($1,800,000).

As affluent buyers are least affected by the economic downturn, they are seen to have been jumping back into the market to a greater degree than other segments. High-end luxury real estate has seen a very strong demand in virtually every housing market in the entire Bay Area.

The Bay Area housing markets with the largest year-over-year increases in the number of listings accepting offers in June 2020 were the 4 outer Bay Area counties of Monterey (up 61%), Santa Cruz (58%), Sonoma (47%), and Napa (37%). They also have among the lowest population densities in the Bay Area.

The more urban counties saw more modest year-over-year increases: San Francisco (6%) and Alameda (7%). Other factors may play a role in this: length/strictness of shelter-in-place rules, home price differences, second-home buying patterns, and so on.

Home sales declined by 7.8% from the prior year but there was a gain of 69.2% as compared to the previous month (May). The median sold price of existing single-family homes in the San Francisco Bay Area housing market was $1,000,000, a year-over-year rise of 4.2%, according to C.A.R.

San Francisco Bay Area housing market had the strongest sales growth in August with a more than 10 percent surge in sales from last year, which is an amazing recovery from the lows in May. This trend continued in September as well with 34.2 percent sales growth as compared to last year. SF Bay Area home prices have also been climbing due to strong demand and low supply.

After reaching near-record levels in July, the median price of single-family homes posted an increase of 20.5% year-over-year in September — the second-highest median price increase in the state of California.

The price decreased by -0.7% as compared to the previous month (August). In the San Francisco county housing market, the median sold price increased by 0.1% to $1,665,000, $2000 more than August's median price. Sales of single-family houses rose by a whopping 90.2% YTY. Sales also increased by 8.4% MTM.

Among Bay Area markets, San Franciso County saw extremely high demand in September. The sales surged by 90.2% YTY — the highest among all the counties of the Bay Area. Single-family house prices rise by 8.1%  to $1,665,000, $2000 more than August's median price.

In San Francisco, supply and demand conditions have diverged between house and condo markets, with the latter being far weaker and rapidly climbing into “buyer’s market” territory.

However, the condo market showed a suddenly increased buyer turnout in September. Sales of condos jumped by 63.1% YTY and 29.9 MTM. Condo prices in San Francisco declined by 7.8% to $1,221,000. As compared to the previous month, the median condo price declined by -4.2%.

In October, the active listings declined by -23.8%. The home prices increased compared to last year in all the nine counties of the SF Bay Area except San Franciso. All nine counties posted an increase in year-over-year sales. Sales of houses throughout the Bay Area increased by 1.5% month to month and 18.9% year to year.

San Mateo, Santa Clara, Marin, Sonoma, and Contra Costa enjoyed the largest sales growth year to year. The highest sales came from Santa Clara County, up 32.4% from last year and 9.5% from the previous month.

Bay Area home prices increased by $40,000 from September to $1,100,000, up by 3.8% MTM. Prices are up 17% more than last October which represents a big growth of $160,000. The highest price growth came again from the Central Coast with an increase of 25.9% from the previous year. September's annual price growth for Central Coast (42.0%) was also the highest in the Bay Area.

The latest report for April 2021 (give at the top) shows that prices are rising and inventory is declining. There aren't enough homes on the market to meet the demand increased by the pandemic.

San Francisco Real Estate Investment Overview

Should you consider San Francisco real estate investment? Many real estate investors have asked themselves if buying a property in San Francisco is a good investment as the median price for a two-bedroom sits at $1.35 million. The high cost of real estate in San Francisco is impossible for most families to manage. Exodus is yet another problem and a new report confirms that the numbers are staggering. Online real estate company Zillow released new statistics shining a stark light on the issue this week.

Their “2020 Urban-Suburban Market Report” reveals that inventory has risen a whopping 96% year on year, as empty homes in the city flood the market like nowhere else in the country. Although this article alone is not a comprehensive source to make a final investment decision for San Francisco, we have collected some evidence-based positive things for those who are keen to invest in the San Francisco real estate market. If you can afford it, then it’s an investment that will continue to increase in value over time.

Amid low-interest rates, there has been an influx of high-end luxury buyers, with certain instances where homes have been sold for $1 million over asking.

Let’s talk a bit about San Francisco and the surrounding bay area before we discuss what lies ahead for investors and homebuyers. San Francisco is home to nearly 900,000 people. It is the hub of the San Jose-San Francisco-Oakland area; this larger metro area is home to nearly nine million people. The city alternately makes the news for people paying incredibly high rents to live in boxes, the homeless problem, and the tech industry.

This makes many think about why or how anyone could live there. Others would think why you’d want to buy a property now in such an overvalued real estate market. Yet we can give you ten positive signs about the San Francisco housing market 2020. Keep on reading to find out more. Why is housing so expensive in San Francisco?

First of all, the entire state of California has a consistent housing shortage due to limited land. Most of the cities including San Francisco are failing to meet the regional housing needs. New construction permits in all cities often lag due to community resistance which blocks new housing. Jobs are increasing and the economy is strongest in 50 years. But due to the tight supply of homes, San Francisco home prices have grown much faster than incomes.

The minimum annual income required for owning a house in the San Francisco bay area in 2019 was $197,970. That's an increase of 119.1% since 2012 when affordability was at its peak. Homeownership is not rebounding anytime soon in San Francisco. By 2025 more than 60% of the population is estimated to rent. Housing affordability has been a consistent issue for first-time buyers over the last few years.

They have limited options in the San Francisco housing market. Although mortgage rates have decreased, big down payments & all-time high home prices aren't spurring more sales. Many simply can’t afford to buy a house due to these factors. Despite Covid-19, in the latest quarter, the San Francisco real estate appreciation rate has been around 0.21%, which amounts to an annual rate of 0.84%.

Some experts feel that home prices may drop by 1 to 2% in the next twelve months. This is a good sign for new homebuyers and investors as far as affordability is concerned as many of them can’t afford to buy a median-priced home in San Francisco.

We shall discuss some more important reasons why you may want to consider buying San Francisco investment properties for the long-term buy and hold.

San Francisco's Strong Economy Propels Real Estate

Why doesn’t everyone just move out of the San Francisco housing market? Some do move, but they have a one and a half to two-hour commute each way to work because they still want to work there. They just can’t afford to live there. Moreover, it is the high-tech job market that draws so many people to San Francisco and leaves many others struggling to pay the bills. San Francisco is turning into a major international city. It is a white-collar city, with fully 90.74% of the workforce employed in white-collar jobs, well above the national average.

In a report published by Google in June 2019, it announced one billion dollars of investment in housing across the Bay Area. A 10-year plan to add thousands of homes to the Bay Area. The company would be making this major investment in what it believes is the most important social issue in the bay area real estate market.

This proposition by Google will add thousands of new homes to the Bay Area real estate market over the next ten years. About $750 million would be used for repurposing Google's own commercial real estate for residential purposes. This will allow for 15,000 new homes at all income levels in the Bay area.

Another $250 million investment fund would be utilized to provide incentives to enable developers to build at least 5,000 affordable housing units across the Bay area housing market.

As a move to support affordable housing initiatives these investments will help Google plans to give $50 million in grants through Google.org to nonprofits focused on the issues of homelessness and displacement of citizens. The company also plans to fund community spaces that provide free access to co-working areas for nonprofits, improving transit options for the community, and supporting programs for career development, education, and local businesses.

As it is the epicenter of the technology industry, there are a lot of people with an immense amount of wealth. Wealth isn’t just limited to the uber-wealthy founders of major tech companies or successful VCs but also the general workforce, whose salaries and incomes are among the highest in the world. Overall, San Francisco is a city of professionals, managers, and sales and office workers. Also of interest is that San Francisco has more people living here who work in computers and math than 95% of the places in the US.

The predicted 2020 job market slowdown won’t result in layoffs, just a drop in job growth to 1.5 to 2 percent a year. Note that the area already has an unemployment rate of 1.2 percent below the national average. The unemployment rate in the San Francisco-Redwood City-South San Francisco MD was 1.8 percent in December 2019, down from a revised 1.9 percent in November 2019, and below the year-ago estimate of 2.1 percent.

This compares with an unadjusted unemployment rate of 3.7 percent for California and 3.4 percent for the nation during the same period. An upcoming recession is likely to have a limited effect on the SF Bay Area’s housing market. It will only temper housing price appreciation but not reduce it. These solid economic fundamentals are integral to maintaining high rental property demand and ensuring a good return on investment.

San Francisco Rental Market

You may read about the growth of Portland and other Pacific Northwest cities as talent and businesses flee the expensive San Francisco real estate market. That’s hardly impacted the San Francisco housing market, though. However, San Francisco has several advantages over its Oregon rivals, and that’s the fact that you aren’t in Oregon. Oregon passed a state-wide rent control law in 2019. This is in addition to many city regulations regarding affordable housing. In Oregon, your ability to raise rents is limited by the state.

Making matters worse, there are many more renters than property owners, so they’ll tighten the allowable rental increases and continue to hamper owners until they’re losing money. And then there is California. You can find a variety of rent control laws in the San Francisco housing market because every city takes its approach to the problem. This means that you can find suburban San Francisco rental properties where you could raise rental rates to match the market. Furthermore, rent control laws typically don’t apply to newer single-family homes.

California, on the whole, is unfriendly to landlords. It is challenging to evict people. It can take a long time to evict someone who occasionally pays the rent. Taxes are high. What does this do to the San Francisco housing market? It leaves open the possibility that you could snap up San Francisco rental properties at a relative bargain price by people who just want to quit, whether they want to sell the properties or leave the state. For example, the laws governing the San Francisco real estate market allow you to buy San Francisco rental properties and evict the tenants to turn the units into condos for sale.

SF Rental Statistics

San Francisco holds the position of the priciest rental market. It is still #1 among the top 5 rental markets in the nation. The average rental income for traditional San Francisco investment properties is well above the national average.  Like most of the Bay Area, the percentage of people renting in San Francisco is more than owners. San Francisco has around 56 percent of its residents living in rental homes.

If condo prices are going to drop or remain flat in 2021, people will see a good investment opportunity. They’ll be able to get in at a good price and there will be an increase in demand. If you’re in the market for a condo in San Francisco, that means you could get a great deal. According to several rent reports (discussed above), rental price declines have hit the bottom and are almost flat as compared to the previous month.

San Francisco's Geography & Zoning Restrictions Limits inventory

San Francisco real estate market is perpetually constrained in terms of inventory. Several factors contribute to this, but principally the strict zoning laws prevent new development and high-rise construction throughout the city. The strict zoning laws, coupled with the fact that the SF is only seven by seven miles, make it a very constrained market and keeps supply perpetually low. San Francisco sits on a peninsula, surrounded on three sides by water.

They cannot build out to meet housing demand. The surrounding cities are densely built up, as well. The only way the San Francisco real estate market could meet demand is by ripping out large swaths of two and three-story buildings to build condo towers, but that’s almost impossible given local regulations. The ability to build up is limited in the surrounding suburbs because of the mountains.

The San Francisco real estate market is, for better or for worse, beholden to several competing interest groups. For those with money that own their homes and have the most influence, “not in my backyard” or NIMBY means that voters fight any proposal to replace a 2 or 3 story warehouse with a 20 story apartment or condo building. They want to protect the look and feel of the community, through high-rise construction could start to relieve the overcrowding in the San Francisco real estate market.

The horrific stories of developers going through four years of red tape to build multi-family San Francisco rental properties deter others from even trying. Ironically, this creates significant returns for those who buy up San Francisco rental properties and can convert them to multi-family housing.

San Francisco's Environmental Movement

The environmentalist movement and California are intertwined in the public’s mind and for good reason. This is the best demonstration of its impact in Marin County. An estimated 85 percent of the county is off-limits to development. This doesn’t mean there are no homes here. It means that there are large estates that cannot be turned into tract homes. Neighbors fight any such project. This is why George Lucas had to threaten to build hundreds of homes on Skywalker Ranch when they wouldn’t let him expand his studios there. This also explains why the San Francisco real estate market cannot solve its affordable housing crisis by building in the relatively open lands in Marin County.

Warehouses and factories have been converted to lofts in large, established cities around the world. They offer open spaces, high ceilings, and proximity to public transit and downtown amenities. San Francisco is no exception to this trend. The difference is the growth in high-density San Francisco rental properties as can only be found in co-living spaces. These can be considered high-end dorms.

People may rent a bunk bed and storage space for their possessions, gaining access to laundry, kitchen, and workout facilities. Several people may share a bedroom that rivals a cramped college dorm room. These facilities are booming because they cater to the new college graduates already used to living this way and willing to continue to do so to work for Big Tech firms in San Francisco.

San Francisco's Luxury Real Estate Market is Booming Despite Pandemic

Dealing in the luxury real estate market has its benefits. More affluent buyers are the demographic least affected by any economic crisis such as brought up by the Covid-19 pandemic as they have the greatest financial resources. Although home prices soaring there is an influx of wealthy buyers. A relatively high percentage of the buyers in the city are all cash (Around 40 to 60 percent of them). Those that aren’t paying all cash are putting at least 20 percent down with the ability to close fast, even with a loan.

In June, house values in California city reached a record monthly high of $1.8 million. Deep-pocketed home buyers across San Francisco bolstered the market’s rebound and pushing up transactions and house prices, according to a report Monday from Compass. The number of luxury single-family homes—defined by the report as those priced at $3 million and above—that accepted an offer in June surpassed 30, the highest level the metric has reached in two years, data from the brokerage showed.

The increase helped push San Francisco house values to a record monthly high of $1.8 million in June, 3% higher than the previous peak of $1.75 million in June 2019. You will find first-time homebuyers who are buying over $2.5 million or baby boomers looking for second homes in the $2 million range. New units are being built in the San Francisco housing market. However, the reality is that the pool of people who can afford to buy is smaller and smaller and the supply of housing is not growing with demand. They mostly consist of luxury condos and mega-mansions built for the elite of the Big Tech workforce.

Another unintended side effect of regulations on San Francisco rental properties is that it incentivizes the construction of high-end units. Investors could invest in these projects or buy properties in the hopes that they are torn down and redeveloped. This is why burned-out husks can sell for hundreds of thousands of dollars and ones with demolition permits can sell for a million or more.

San Francisco's Real Estate Appreciation Rate is High

Thanks to all the factors discussed above, the entire bay area has one of the highest appreciation rates. A major reason San Francisco’s housing prices have climbed so high over the past decade is the city’s vibrant tech industry, which started booming in 2012 (thanks, in part, to a tax incentive aimed at attracting tech companies to the city over Silicon Valley). It now attracts a skilled workforce to the city while also driving up the demand for housing and the cost of living.

The data from NeighborhoodScout reveals that San Francisco real estate appreciated 91.99% over the last ten years, which is an average annual home appreciation rate of 6.74%. This figure puts San Francisco in the top 10% nationally for real estate appreciation. And within San Francisco, some individual neighborhoods’ home values have jumped by more than 100%, according to Trulia & Zillow. Here are the five San Francisco neighborhoods that have had the biggest jump.

• Bayview: Bayview had a $424,900 median home value in April 2009, which went to $1.07 million in Jan 2020. The current value is $977,871 (Zillow Home Value Index).
• The Forest Knolls: In April 2009, the neighborhood’s median home value was $811,800, and it topped $1.8 million in Aug 2018. The current value is $1,727,751.
• Bernal Heights: This neighborhood went from a median home value of $715,000 in April 2009 to $1.66 million in Aug 2018. The current value is $1,628,977.
• Mission: This East of The Castro neighborhood is in central San Francisco. The median home value was $699,900 in April 2009 and $1.53 million in Dec 2019. The current value is $1,397,554.
• Potrero Hill: This neighborhood lies in the East of the Mission District. It has a median home value of $734,200 in April 2009 and it topped $1.59 million in Sep 2020. The current value is $1,540,493.

The good news is that if you are a home buyer or real estate investor, San Francisco has a track record of being one of the best long-term real estate investments in the nation through the last ten years. So if you bought a home in San Francisco 10 years ago, it’s very likely you’d have profited on the deal by now — in fact, in several neighborhoods, you would have a good chance at doubling your money. All the variables that contribute to real estate appreciation continue to trend upwards which makes investing in SF real estate a sound decision.

Where To Invest In San Francisco Real Estate Market?

Are you looking to buy an investment property in the San Francisco real estate market? California has the 6th largest economy in the entire world. This is largely driven by its innovative production, the heavy tech sectors in the state, and more. The San Francisco market is expensive, but that doesn’t mean it is overpriced. There are opportunities, though they come with risks. If the city had better leadership and more people willing to allow redevelopment on a large scale, the city could blossom.

Good cash flow from San Francisco investment property means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding the best investment property in San Francisco in a growing neighborhood would be key to your success.

If you invest wisely in San Francisco real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate. The less expensive the San Francisco investment property is, the lower your ongoing expenses will be.

When looking for the best real estate investments in San Francisco, you should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing. San Francisco home prices are not only among the most expensive in the state of California but they are also some of the most expensive in all of the United States. According to Realtor.com, Dolores Heights has a median listing price of $2.5M, making it the most expensive neighborhood.

Some of the popular neighborhoods in and around San Francisco are South Beach, Pacific Heights, Mission District, Presidio Heights, Excelsior, St. Francis Wood, North Beach, West Portal, Outer Sunset, Hayes Valley, Portola, Dogpatch, Bernal Heights, Noe Valley, and Russian Hill.

According to Financialsamurai.com, the best neighborhood to buy property in San Francisco is Golden Gate Heights. This neighborhood has many homes with ocean view properties (under $1,000/Sq Ft), and some of the best schools in SF. Golden Gate Heights consists of mainly single-family homes instead of condos. As a result, the neighborhood is family-friendly and much less dense than other areas of San Francisco. The neighborhood is relatively inexpensive. At an average price per square foot of $850 – $980, Golden Gate Heights is an absolute steal compared to other neighborhoods in San Francisco.

Other best neighborhoods to buy investment properties in San Francisco are:

• Inner Parkside, Parkside
• Inner Sunset, Outer Sunset
• Inner Richmond, Outer Richmond
• Diamond Heights

All of these neighborhoods are safe, relatively inexpensive, and offer single-family homes for working-class people in the SF Bay Area. Single-family homes are defensive during downturns and tend to outperform during upturns.

Bernal Heights is considered an ideally located yet still moderately affordable place to raise a family. It’s on the south side of San Francisco, so it’s very easy to commute. The median home value in Bernal Heights is $1,587,365. Bernal Heights home values have gone up 1.5% over the past year and this neighborhood will continue to rise in value.

Tenderloin is an affordable neighborhood for those who can afford to buy a home in the median price range of $570K. As of June 2020, the Tenderloin was a balanced real estate market, which means there was a healthy balance of buyers and sellers in the market. When housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.

Bayview is one of the most affordable neighborhoods, with a median listing price of $944K (on Realtor.com). Bayview saw an astounding 136% appreciation from 2000 to 2006, followed by a huge 50% drop from 2006 to 2010/2011. From 2012 onward the recovery has been consistent. From Jan 2012 ($428,000) to June 2020 ($1.01M), the median home price has appreciated by a whopping 133% (As on Zillow's home price index). Bayview home values have gone up 4.7% over the past year alone.

Median housing prices in Bayview are also still among the lowest of any neighborhood in the city, which attracts buyers looking to get a foothold in the rapidly appreciating Bay Area housing market. The markets in Bayview and nearby neighborhoods are quite strong because they contain the most affordable houses in the city. It has one of the highest appreciation rates in the SF Bay Area region. During the downturn, its housing market became dominated by distressed sales and it fell so far that now, with the disappearance of the subprime effect, its recovery has been equally dramatic.

Stoneridge Park is a neighborhood in Pleasanton, California. It lies in Alameda County—one of the nine counties of the Bay Area region. According to Niche.com, it is a family-friendly neighborhood and one of the best places to live in California. Living in Stoneridge Park offers residents an urban-suburban mix feel and most residents own their homes. In Stoneridge Park, there are a lot of restaurants, coffee shops, and parks. The public schools in Stoneridge Park are highly rated (A+). The median home value is $911,000 and the median rent is $2,572.

Parkside receives an overall grade of A from Niche.com. It is a neighborhood in San Francisco County and is also considered one of the best places to live in California. Living here offers residents an urban-suburban mix feel and most residents own their homes. The public schools in Parkside are highly rated. It is an expensive neighborhood with a median home value of $1,010,820. The median rent is $2,322. Parkside home values have gone up 4.9% over the past year and Zillow predicts they will fall -2.1% within the next year.

Here are the top neighborhoods in San Francisco having the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.

1. Garces Dr / Vidal Dr
2. San Francisco State U / 19th Ave
3. American Conservatory Theater / Bush St
4. Golden Gate Ave / Leavenworth St
5. Geary St / Taylor St
6. Kearny St / California St
7. Turk St / Taylor St
8. Ofarrell St / Taylor St
9. Montgomery St / Jackson St
10. Golden Gate Ave / Market St

California Real Estate Investment Markets

Apart from San Francisco, you can also invest in many other real estate markets in California. California's real estate market is the focus of many U.S. and foreign real estate investors.

Another market to buy rental properties in California is San Jose. San Jose is part of Silicon Valley, a place where $100,000 a year or higher salaries from competing for tech firms has driven up the cost of real estate. But what about the San Jose housing market itself? San Jose is the third-largest city in California, home to roughly a million people. It has the highest cost of living in any area in the U.S., and it is one of the most expensive housing markets in the country.

If you want to invest in the San Jose rental properties, you may not need to buy and renovate. Instead, if you know of industrial or commercial properties near major employers they may need to convert to employee housing, which you could buy now and hold until it sells. If that doesn’t happen, you could still turn it into a co-working space.

The San Diego real estate market offers an ideal mix of limited supply, high demand, and excellent income potential. If you’re going to invest in California, it needs to be in San Diego. The San Diego real estate market has been ranked among the ten most expensive real estate markets in the country, though it ranks below several other West Coast cities. This creates massive demand for San Diego rental properties by those who simply cannot afford to buy homes. The rental market will continue to grow as the city grows an estimated 500,000 by 2050, adding tens of thousands each year.

Another expensive market like San Francisco is LA. The numbers may not make sense for many investors but if you ask savvy investors based in LA they would like to bet anytime on this expensive real estate market. The Los Angeles real estate market has many points in its favor beyond its sheer size. The strong market fundamentals make the Los Angeles housing market a good place to invest if you’re looking at buying real estate in California.

Los Angeles has an unemployment rate of around 4%. What makes Los Angeles unique is the employment market. Want to work in Hollywood? Move to L.A. Want to work for a production company or in fashion? Come to L.A. If rent is too high, share an apartment or single-family home with friends. The Los Angeles housing market has seen a bump in residential construction. This has helped to satisfy some demand from renters. However, due to increasing demand, the new supply hasn’t brought prices down.

The Oakland real estate market is a cheaper version of the San Francisco real estate market with similar rental rates and a slightly friendly legal climate. It presents a good opportunity for real estate investors. The Oakland real estate market is second only to San Francisco in terms of rental rates. It is rivaling New York City, Boston, and San Francisco in terms of rental prices. One-bedroom apartments are averaging $2400 a month. Yet Oakland housing units remain two hundred to five hundred thousand dollars cheaper than San Francisco properties. This means you’ll see far better ROI on Oakland rental properties than San Francisco properties.

NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in San Francisco.

Consult with one of the investment counselors who can help build you a custom portfolio of San Francisco turnkey investment properties in some of the best neighborhoods. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete San Francisco turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.

Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.

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Please do not make any real estate or financial decisions based solely on the information found within this article. Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.

References:

Market Data, Reports & Forecasts
https://www.car.org/en/marketdata/data
https://www.zillow.com/sanfrancisco-ca/home-values
https://www.zillow.com/research/2020-urb-suburb-market-report-27712/
https://www.littlebighomes.com/real-estate-san-francisco.html
https://www.realtor.com/realestateandhomes-search/SanFrancisco_CA/overview
https://www.bayareamarketreports.com/trend/san-francisco-home-prices-market-trends-news

San Franciso (City) Cooling-off
https://www.cnbc.com/2020/09/27/san-francisco-housing-suburbs-red-hot-but-city-still-in-demand.html

City details
http://worldpopulationreview.com/us-cities/san-francisco-population

Best Neighborhoods
https://www.neighborhoodscout.com/ca/san-francisco/real-estate
https://www.helena7x7.com/san-francisco-neighborhood-appreciation-rates/
https://www.financialsamurai.com/best-san-francisco-neighborhoods-to-buy-property-for-price-appreciation
https://www.niche.com/places-to-live/search/best-neighborhoods-to-buy-a-house/m/san-francisco-metro-area/

Rental Market Statistics
https://www.rentcafe.com/average-rent-market-trends/us/ca/san-francisco/
https://www.rentjungle.com/average-rent-in-san-francisco-rent-trends/
https://www.zumper.com/blog/rental-price-data/
https://www.nolo.com/legal-encyclopedia/california-rent-control-law.html
https://homeguides.sfgate.com/tenants-rights-landlord-sells-house-53734.html
https://www.npr.org/2019/02/27/698509957/oregon-set-to-pass-the-first-statewide-rent-control-bill

Should You Invest in SF
https://realestate.usnews.com/places/california/san-francisco/jobs
https://sf.curbed.com/2020/3/11/21155283/buying-a-house-san-francisco-2020
https://reason.com/2018/02/21/san-francisco-man-has-spent-4-years-1-mi
https://www.nytimes.com/2017/01/21/us/san-francisco-children.html
https://www.latimes.com/politics/la-pol-ca-marin-county-affordable-housing-20170107-story.html
https://www.citylab.com/equity/2016/04/blame-geography-for-high-housing-prices/478680
https://www.theguardian.com/business/2016/aug/05/high-house-prices-san-francisco-tech-boom-inequality
https://www.mercurynews.com/2019/03/14/bay-area-job-market-slowdown-experts-predict-google-apple-amazon-facebook
https://www.washingtonpost.com/news/morning-mix/wp/2015/04/17/george-lucas-wants-to-build-affordable-housing-on-his-land-because-weve-got-enough-millionaires

Luxury market
https://www.mercurynews.com/2014/03/05/in-the-bay-area-million-dollar-homes-are-torn-down-to-start-fresh
https://www.sfgate.com/realestate/article/863-carolina-street-potrero-hill-tear-down-listing-13844146.php
https://www.housingwire.com/articles/36691-la-demolishing-affordable-housing-building-luxury-housing-instead