The SoCal Real Estate Roller coaster: Here We Go Again
California is notorious for its real estate market. And it is also commonly-known that each time the national market and the talking heads declare that the California real estate market "isn't coming back for quite sometime this time" that it always does come back - and much faster than anyone would think.
The reasons behind L.A. condominium market resiliency in particular are no mystery. California generally has a huge economy - if it were a national economy, it would be one of the 5 biggest in the world. And beyond that, the population of California and Southern California and the Los Angeles area in particular is steadily growing at a rate faster than the rest of the country's.
A growing population puts demand pressure on supplies and raises prices.
Of course, every now and then prices get ahead of themselves in Southern California, which is why the Los Angeles real estate auctions are busy liquidating thousands of foreclosed homes that were sold to people who couldn't afford them in the first place or who no longer can because their incomes won't support it or because they are too underwater to make staying in those homes worthwhile.
But the bustling activity at the Los Angeles real estate auctions is precisely part of the reason why SoCal condominiums' values aren't to be doubted. And there are a few catalysts on the horizon that could accelerate the recovery of this perennial boom-bust market.
First, legislation aimed at addressing immigration from Mexico and the rest of Central and South America could legitimize a huge population that would be eager to soak up inventory at the lower end of the market, putting in a substantial floor under the rest of the median-priced market.
Second, economic shifts toward jobs in the internet, semiconductors, green energy, and agriculture all bode well for southern California, whose economy is far less dependent on finance and services than economies like those found in the Northeast (NY, Boston) or Midwest (Chicago).
Third, federal aid to assist California in dealing with its current budget crisis could stimulate the state's wobbly economy and put demand back on even surer footing.
Every fifteen years, California experiences a real estate bust that pundits swear will damage the market for decades; this one is no different, and though it may not the last, it certainly represents an attractive opportunity.
