Lender · Salt Lake City, UT · Member since 2012 · 714 posts · 169 votes
It seems every day I hear another story from a real estate investor or a real estate professional in California about how crazy the real estate market is getting. Every day there are bidding wars, contractors are now charging for bids because they are receiving so much rehab work, realtors are getting nervous and edgy with all of the competition their buyers are up against.
But just what is happening in the California real estate market? Is it a mini-speculative bubble all over again? As Robert Shiller said in a Wall Street Journal article a few months ago, people are beginning to think about real estate like they think about the stock market.
What is your opinion about the buying frenzy in California right now? Please share.
I can tell you that as an agent, it is really hard to get offers accepted. Cash offers or otherwise. Often we are competing with 30 other offers; there always seems to be a cash offer above list price.
I don't know of it can be considered a bubble yet but prices are definitely rising.
Here in southern california, there are alot of buyers from china who are just flooding the market with cash.
Well, I been putting offer in for the past 5 month. Up till now, I always been out bet by someone, or 70% of time CASH buyer. Believe or not Most of these CASH buyer are Asian, and guess what. Too many Asian here in CA.
PS: Too many Rich people around with pot of gold under their beds.
It seems to be the same here in Denver. Low inventory, hot market, low interest rates, and a city experiencing rapid growth combine for a hot market.
I put a property under contract yesterday where the seller was unwilling to come down in price beyond 1%. Another offer we wrote up with an investor client of mine was rejected as a cash deal for a package of 2 properties that the owner owned at 92% to list. His counter was full price.
Bank owned cash deal at 100% to list and did not get it.
HUD offer at about 107% to list cash deal and missed out on that.
California is a BIG... state. with 58 counties. In the center of California stretching from the south to the north is a big valley with major rivers. The land along the valley has areas of development, and areas of farmland. Along the coastline from central California (those in the bay area. think they live in northern CA but don't) south to San Diego have areas with extremely expensive real estate. Those areas also are doing fairly well in the current market, due to the fact those areas are always the most in demand, being close to the coast and having mild weather. The coast north of S.F. and up to Crescent City is more rugged and has beautiful redwoods, but lots of fog, making it less in demand. The northern part of California (Shasta County) has beautiful lakes, mountains with snow, and alot of recreational opportuniites., as does the eastern mountain ranges (Tahoe).
Some of the areas of California are doing great. Alot of the state has unemployment close to 20% and are very poor with no industry to speak of.
So, in answer to the question, there are a few areas of California along the coast that are doing really well and real estate is in high demand, and other areas that were heavily dependent upon construction and are struggling. If you want to invest in California, as with anywhere, KNOW the local market, because there are huge variations.
Orange County is great though, and I can help you here!! and I'm very knowledgable on Shasta County should anyone be interested in it.
In my area of CA it's been crazy for the last couple years. It's much tougher now as inventory has dried up severly. After prices bottomed we were picking up MF/SF and could pick and choose. By 2011 it started to get really competitive, multiple cash offers, one in particular I remember had 31 offers after the first couple days. New construction is picking up now.