(BPT) - From Wine Country in Northern California to the thriving suburbs of Los Angeles, real estate throughout the Golden State is in high demand. For California residents, this is no secret, as new generations of buyers are transforming neighborhoods with a dynamic desire for luxury, convenience and character.
While there is a widespread slowdown in sales of high-end homes throughout the United States, California real estate inventory remains tight as demand soars. Opportunities for buyers may not be as pronounced as in other parts of the country, but for those who want to invest in California real estate, there is still opportunity with a strategic approach and thoughtful mindset.
The 2019 California Market Trends report by Sotheby’s International Realty finds unique trends in each of the major markets in the state, yet all are underscored by the overarching theme of in-demand real estate, where prices are pushing higher due to a variety of considerations. Here are some of the key takeaways from the report:
San Francisco: Fierce competition for limited housing stock
With a robust economy and incredibly low unemployment, San Francisco's prosperous economy aligns nicely with its booming real estate market. June data insights are eye-opening: According to the local MLS, the median price of a single-family home hit a record high at $1.77 million, median condo prices rose to $1.31 million in June, up from $1.18 million just a year ago, and the average deal closed was 11% higher than the asking price.
Private real estate deals are common in San Francisco, with an estimated 30% of significant deals trading off-market, making a knowledgeable and connected real estate agent a must. Millennials are boosting the new wave of high-end deals, seeking homes with authenticity and functionality. They tend to seek properties on the south side of the city, in areas including Noe Valley, the Mission and Bernal Heights, while also moving into new areas, such as Hayes Valley.
Greater Los Angeles: Just minutes out of L.A. proper brings opportunity
Affluent house hunters seek impressive architecture and amenities in well-heeled parts of Los Angeles, with record-breaking real estate deals surpassing $100 million. For other buyers, luxury and opportunity await in greater Los Angeles. For example, the Palos Verdes Peninsula and surrounding South Bay neighborhoods are currently experiencing a buyers’ market with plentiful inventory. This coastal area southwest of Los Angeles offers close proximity to beautiful beaches and a cooler climate than the city, ideal for families seeking a city escape while taking advantage of the area’s outstanding schools.
Other notable areas for real estate buyers are eastern neighborhoods including Los Feliz, Silver Lake, Echo Park and Atwater Village. Demand is strong for the small-lot development trend — meaning multiple structures, with no shared walls, on a single lot. Further east, buyers can find even more value in Eagle Rock, Highland Park and Mount Washington. On a price-per-square-foot basis, homes in Highland Park are roughly half the price of those in Los Feliz and Silver Lake.
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Wine Country: Bouncing back after the devastating wildfires
Last year's wildfires claimed a bounty of beautiful homes in California's wine country. Fortunately, resiliency is proving strong, as many owners of lost houses are building new, amenity-filled homes with in-demand features such as solar and smart technologies. What's more, these owners are building with intent to sell. This is creating a tremendous opportunity for home buyers, who now have access to broader inventory and the associated negotiation power that comes with it.
What Wine Country home buyers should know: According to the local MLS, the median home price in Sonoma County declined about 4.5% in June, to $635,000, compared with $665,000 a year ago. Sellers throughout Sonoma and Napa counties are a little more likely to negotiate on price, giving buyers the upper hand in scoring a deal and possibly a wonderful real estate investment.
Monterey County: Lightning-fast sales thanks to the remote worker trend
Legendary golf, ocean views and mountain terrain attract buyers from around the world to the County of Monterey, where the typical home spends just three weeks on the market before closing. Entry-level homes are particularly scarce, so competition for lower-priced properties is stiff.
While the area is ideal for people looking for a breathtaking and versatile second home, demand for home sales has increased recently due to the rise of work-from-home careers. Areas are experiencing higher volumes of transplants that choose to work remotely and go into the office — whether in Los Angeles or Silicon Valley — occasionally as needed.
Whether you're selling your home and looking to upgrade, or, purchasing an entry-level luxury home and want an edge in the market, a savvy real estate professional working for you will make a world of difference, from helping you discover the perfect property to negotiating a smart deal. Learn more at www.sothebysrealty.com.