Reasons for High Housing Costs in California
One of the biggest contributors to the high cost of living in California is the state’s high housing costs. Why do houses cost so much to buy in the state? And what can you do about this housing crisis and sky-high real estate prices? Like many, you may choose to move out of state. However, to avoid a similar situation in your new home of rising home prices, you should understand what happened in California.
Not Enough Homes to Go Around
The state’s population has been booming over the years. However, the rate of new home construction has stagnated. Plus, many of the existing homes are going to renters instead of homeowners. Small investors are choosing to rent the property for the profits it can bring. However, with landlords buying up homes, there are fewer options for individuals who want to buy their homes. The tighter housing market means costs go up.
Legal Issues Make New Home Construction Difficult
In the 1970s, the state sought to drop property taxes for residents. However, the consequences of Proposition 13 continue today. Because housing property taxes are capped, cities are disincentivized to authorized new home construction because they can get more tax money from retail property. Therefore, many areas do not get legal approval for new homes, which keeps the number of available homes low, raising prices.
Materials and Land Cost More in California
Lastly, the geography of the state makes materials and land even pricier than in other parts of the country. Many urban areas are along the coast. However, the amount of available land in these areas is greatly limited. Therefore, there is less land available, driving up the cost. Plus, labor used for home construction is much more expensive due to a shortage of people in the construction industry.
Offload Your California Property and Get Away from High Housing Costs with Help from IMPACT Properties
Turn to us at IMPACT Properties to get help with your real estate to move out of California. We can work with you to take care of the details of relocating to a place that has lower housing costs and a lower cost of living compared to California. Start the process by seeing how much you could get for your California real estate at our website.