The California real estate market has done everything it can to set itself apart from the rest of the country. Median home prices have increased exponentially over the course of 2021, equity has returned where it was once thought gone forever, yet demand remains stronger than ever. Perhaps even more importantly, economic indicators suggest more people are willing and able to buy homes today, despite historically high acquisition costs. For all intents and purposes, real estate in California is firing on all but one cylinder: inventory.
The distinct lack of available housing is the primary reason home prices are so high. It is reasonable to assume prices will continue to rise until more inventory is brought to the market, which could be years away. In the meantime, investors have started emphasizing long-term exit strategies, not the least of which include building or adding to rental property portfolios. If for nothing else, new indicators created in the wake of the pandemic favor buy-and-hold strategies over their short-term counterparts.