The reason for the rapid and continuous increase in California real estate is always the story that many people are curious about. Here are five main reasons why Orange County’s real estate market has been “boiling” for a long time.
The amount of empty real estate is always lacking
Real estate experts have long been debating the reason why the California real estate market has always appreciated. Many opinions have been raised, but there is one view that all investors have recognized that California has not built enough houses to keep up with the number of people living here. California’s housing management department estimates that 180,000 new houses are needed each year. But in the past decade the state has not even met half that number.
The demand for living and working in California is booming
People in and out of the state are increasingly moving to big cities to work. This contributes to pushing up real estate prices. From 2010 to 2017, nearly 20% of California’s population moved to the Bay Area to live and work.
The booming technology industry is a major factor in this trend. The area inside and outside Silicon Valley has a huge housing demand, especially for rental housing.
Proposal No. 13 hinders construction work
Many people have questioned why California does not build enough housing to keep pace with population growth? Most researchers argue that this comes from the number 13 bill of 1978, limiting the number of local governments that can collect taxes from real estate. There is much debate that Proposition 13 is just an excuse to leverage the shortage of vacant houses, but this is still one of the reasons recognized by many experts.
California’s construction approval process is quite time-consuming and costly
The process for a land here is approved to build quite cumbersome and time consuming. The typical approval time is one year, while the general approval period is 8 months. This makes the construction process longer. The construction plan must go through several classes, including the planning department, the health department, the fire department, the construction department and perhaps the most important city council.