Sunny California is a hot spot for a lot of reasons; Californians enjoy a laid-back lifestyle centered around the picturesque beaches, a variety of outdoor activities, and unmatchable weather. Buyers pay for the location, and California is no stranger to steep real estate prices as a result.
However, Covid-19 has altered the trend in home buying drastically, and the populated hubs once known for their allure are deterring buyers as they escape for more space.
Since location is no longer an issue, remote workers are free to search for homes that are more than just a place to rest their heads. Houses in these unprecedented times now need to be multifunctional quarters that incorporate many roles – including recreation, work, and education.
Within a matter of months, the rise in teleworking has inverted parts of the state’s real estate market in ways housing economists never imagined possible. The median rent in San Francisco has dropped nearly 25% since stay-at-home orders began in March 2020. Other big cities such as Oakland, Los Angeles, and San Diego have also seen rents drop or at least taper, almost instantly flattening a decade-long spike.
As younger professionals flee overcrowded and overpriced apartments in urban cores, rents and home prices in many suburbs, exurbs, and mid-size cities have shot up significantly.
Fresno, Bakersfield, and Chula Vista have seen some of the biggest post-pandemic rent increases in the country. The median price of a single-family home in California set an all-time high of over $700,000 in late 2020, with some of the steepest increases in the Inland Empire and Central Valley.
The reaction in the market was unprecedented but is understandable. The divide between time spent in the office versus time at home has been skewed greatly. Those who long for more space may flee the city, accepting a longer daily commute if they only have to make the trip a handful of times per month. In exchange, they’ll enjoy larger homes, lower real estate prices, better schools, and neighborhoods with a lower crime – traits that typically characterize the suburbs.
Zoom Out: For those who have accepted fully remote positions, the option to flee California all together has become quite enticing. Internet property searches have soared during the health crisis; online searches for Boise, Seattle, Phoenix, and Atlanta are rising fastest among people who live in coastal cities, like Los Angeles and New York. With remote work becoming a more prominent facet of the future, homebuyers are looking at states with lower income tax rates, and ways to stretch their dollar further.
Bluefire Mortgage Group specializes in financing mortgages throughout the entire state of California and is prepared to get you the best rate for your budget. Whether you are fleeing the city or looking to refinance where you are, we will help you achieve your goals. Please reach out to us with any questions you might have at (760) 930-0569!