If you plan on moving to the greater Los Angeles area or anywhere in Southern California, you might have already started tracking the market you are interested in and looking at prices of rentals. RTI Properties provides property management in Los Angeles and Orange County for small apartment buildings, single and multi-family homes, HOA’s, as well as large apartment complexes throughout Southern California – as well as most popularly in the Los Angeles area limits. Call today at (310) 532-5994 for more information. For now, let’s look at what you should expect today in Southern California’s hot real estate market, as well as the outlook for 2021 in general.
Southern California’s Real Estate And Rental Markets
Having a solid understanding of Southern California rental market trends will enable you to make a move with much more confidence and ease. With such a large population, California is facing a shortage of rental properties – meaning a higher median rental price (which will continue to grow). Real estate prices in Southern California are some of the highest in the country, so it may seem like a daunting task to get yourself into the market. However, higher prices lead to higher returns, which can be telling signs of what California real estate will bring in the future.
In Cali, there are so many more renters in comparison to buyers. The median home price is simply too high for most people to afford. One of the top reasons why people buy real estate properties is to rent it out and make a profit. The U.S. officially became a “renter’s nation” back in 2018, as renting surpassed homeownership. These numbers haven’t changed, and in 2020, expect the Southern California real estate market to continue to grow in both price and population.
There is a significant drop in unsold inventory across Southern California at the end of 2019, with the most considerable drop in inventory found in November, down 22.5% from the previous year. The California Association of Realtors reports that the end of 2019 saw a slight decline in home sales from prior months, though there is still an over 5% increase from the year previous. This decrease is despite low mortgage rates and flat home prices; currently, the overall median home price in Southern California is $533,000, which is well above the national average and is expected to increase to closer to $600K by the end of 2020 and same with Los Angeles, CA too. Contact RTI Property Managers for more insight on real estate in the best area of Southern California and have your best interest in Los Angeles Property Management.
How Rent Control Affect Southern California Housing Market
With rental prices soaring, rental control may soon enter the picture. What exactly is rent control? Rent control law regulates the amount of money that can be charged for you to live in a rental property. Over the past few years, there has been a substantial public increase in wanting statewide rent control due to California being one of the most expensive places to rent in the United States.
However, statewide rent control may hurt the housing market. The evidence says that the rent control policies can lead to a reduction in the rental housing stock. In the 1990s, when San Francisco imposed rent control, 10% of landlords were more likely to convert their buildings into condos resulting in rents in the city ended up increasing 5.1% from 1995 to 2012. Additionally, our analysts found that rents for apartments that were exempt from rent control policies are much more in growth substantially.
Another research on rent control has suggested that the policies may result in deterioration in the quality of the construction of new rental housing and will discourage investment, shrink the availability of affordable housing that already exists and squeeze the Southern California housing market.
However, if providing a more stable foundation for households, the benefits of rent control outweigh the adverse outcomes.
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The Average Rent Price in Southern California Is On The Rise
In Los Angeles, on average, apartments are rented out for roughly $2,545 each month. The largest city in Southern California (Los Angeles) saw a year-over-year increase of 3.5% ($85), compared to this time last year. Overall, Southern California rental properties are on the rise and will only continue to rise throughout 2020 and the following years. The area’s most expensive place to rent in Santa Monica, with a median rental price of $3,926, according to Los Angeles real estate experts, ParkRegency Realty. The cheapest place to live has been noted as Indio – the average rent being roughly $1,141. The upward streak will be maintained in 2020, as the number of renters in the area continues to grow. Apartment demand is at an all-time high, and homeownership is reaching a low. Contact RTI Properties professionals for Los Angeles Apartment property management.
The Best Cities For Renting In Southern California
The most popular places for renting are in large metropolitan areas such as San Diego, Los Angeles, San Francisco, and the Bay Area. Real estate markets that are expected to see a large population and rental influx are now moving into Sacramento, Riverside, and San Bernardino. According to research, the following cities have been noted as the best places to buy a house in Southern California and rent it out in 2020:
- Median Home Price: $627,500
- Price/Square Foot: $500
- Median Rent Price: $3,272
- Median Property Price: $689,999
- Price/Square Foot: $525
- Median Rent Price: $3,000
- Median Property Price: $ 330,000
- Price/Square Foot: $235
- Median Rent Price: $1,795
- Median Property Price: $449,900
- Price/Square Foot: $250
- Median Rent Price: $ 2,145
- Median Property Price: $310,000
- Price/Square Foot: $226
- Median Rent Price: $1,550
Contact RTI Properties today to learn more about the best places to buy homes to rent out, or to rent your own place in Southern California simply. With prices and population (as well as the real estate market) booming, the best time to invest is now!
The Bottom Line
You might be a bit puzzled about how you are planning to invest in Southern California real estate, and trust me; you’re not alone. However, thousands of people every year successfully make a move to the sunny SoCal region and are super happy with the choice they made – despite the steep cost of living and rental prices. In Los Angeles alone, the median rental price is $2,545. With that being said, it isn’t impossible to get to the area. Plus, there are tons of amazing job opportunities, schools, and beautiful neighborhoods in the area that make the greater Los Angeles area worth moving to. In 2020, expect the real estate market in Los Angeles to continue to rise, as the demand for rentals grows, and the need to build more units grows as well. Call RTI Properties, Inc. today to get help with moving into the rental of your dreams and the best property management services in Southern California.