Real Estate in California

California has one of the biggest real estate industry in US. Much of the credit has to be given to the ever increasing population of this state which is ticking at about 38 million. One of the major part of this fact is mainly because of immigration of people from all around the world. In the last decade, international migration was about 1.8 million. The credit goes to how California transformed into world center of the entertainment and music industries, of technology, engineering and the aerospace industry and as U.S. center of agricultural production. This dragged more and more people into this golden state. When you see geography of the state, about 45% of the state’s surface area is the forestland and considered to be the state with more forestland than any other state in US except Alaska. So the developed areas are getting denser and denser where forestland and other less interested areas remained almost no mans’ land.

California is home to eight of the 50 most populous states in United States: Los Angeles (2nd), San Diego (8th), San Jose (10th), San Francisco (13th), Fresno (34th), Sacramento (35th), Long Beach (36th), and Oakland (47th). I think you might already guessed why I am talking about all the number nonsense mentioned above in this “real estate” blog. Yes, you guessed it right. I know you are smart person;). The theory of economics of demand and supply comes into picture. The density of population in many of these metropolitan areas is grown so high that the bidding war for a piece of land has driven the land prices in California so high. The economy of California is largest in United States. Its Gross State Production(GSP) is above $2 Trillion. As of 2010 data, there are about 663 millionaires in California State, more than any other state in US.  The median household income was about $62K and ranked 10^th highest in the US states. This has given people power to fight for the land and pushing the prices higher. The suburban areas, bordering these metropolitan areas, have also seen effect of increase in population driving the real estate business in those areas too.

Real Estate is one of great ways to hedge against inflation. As value of dollar goes down, you need more money to purchase real estate. So if you buy and hold real estate long enough, there is almost certainty that you will make money in real estate. I personally like real estate because it is tangible and useful as it provides housing which is one of the main necessities of every living being on earth. One can use his real estate for say leveraging to invest in other areas, tax savings etc.  Only thing is you must make sure you chose right property as not all properties make financial sense. You are going to invest big chunk of money into real estate and would expect to fulfill your expectations. It can be either using it as perfect retirement home or resale at good profits or can be any other reasons. You would feel very happy and pride when it serves its purpose. That’s where real estate agent comes into picture. He makes sure to guide and assist you to invest in a property that would fulfill your dreams and expectations. It would take other post to write about why one needs real estate agents to buy or sell property.

CONCLUSION:

To end the post, my personal opinion is, lets me stress the word "PERSONAL" again, it would be good to have your share of real estate in California State. It is most probably trending towards pushing the prices higher and higher until its keeps on attracting more and more people into the state and/or the economy and median household income gets bigger and bigger. Following historical data shows that investing in real estate is one of best hedges against inflation. You can worry much less about inflation if you have an investment in real estate. It can give you yield enhancement as part of your investment portfolio. Real Estate allows you to achieve better returns for given level of portfolio risk. Being a tangible asset, you can increase its performance or value by making improvements to it. Unlike other assets, it can provide you shelter(housing) and give peace of mind.