The California real estate market is a focal point for a large contingent of domestic and international property investors. But where exactly should you focus your search for promising multi-family properties in the Golden State? As one of the most in-demand locations to reside and vacation in, the California housing scene is always an active one—regardless of how pricy it can be. Notwithstanding the tumultuous COVID-19 experience last year, the Northern California real estate industry proved remarkably resilient—and record-high metrics from Roseville to Sunnyvale in recent weeks lend credence to projections that the momentum will continue for the foreseeable future. With increased demand, dropping unemployment rates and exponentially rising home sale values, Northern California is gearing up for another booming year of activity—an opportunity real estate investors should jump on. Although California is notoriously expensive and it can seem daunting for those investors looking to break into the market, there are still plenty of areas where savvy investors can snap up lucrative rental properties and position themselves for long-term, sustainable financial success. The key is to start your search beyond the cluttered markets of major urban areas like San Francisco and Los Angeles. For multi-family property investors, concentrating your initial property search in Northern California is a great approach to find great properties at below-market values. To that end, here is a look at some of the most promising cities to acquire multifamily properties in Northern California.
Sonoma County
2020 finished up as a record year in the Sonoma County housing market. Attributable mainly to the pandemic-influenced migration around the country, the average sales price increased by an average of 8% from the previous year. Apart from COVID-19, the other two primary market conditions influencing multifamily property transactions are the reduced interest rates and elevated buyer demand. Potential buyers can now qualify from more square footage, and with the lower inventory hitting the market, things are becoming particularly competitive. As the economy opens up and unemployment levels steadily dropping, the Sonoma County market is looking promising. Aspiring real estate investors looking to capitalize on the increased demand for housing options in the Sonoma County area would be well-advised to fund their acquisition with a flexible hard-money loan in order to cut down on the closing timeline and start sourcing viable tenants from what is expected to be a well-qualified and abundant pool of renters.
Mendocino County
The rural Northern California commune of Mendocino County offers a plethora of recreational opportunities that are sure to draw plenty of both vacation renters and long-term tenants. The area is also experiencing the lowest inventory levels according to MLS reporting data since 2005—nearly 43% under last year’s mark. The average closing price of properties listed in Mendocino County in March was $515,000, which is a 10% net increase from 2020 and is directly correlated to the increased demand and lowered inventory that many markets around the nation are facing. This is an exciting environment for real estate investors, who can cash in on a healthy return on investment by purchasing multi-family developments now and marketing them to the numerous tenants seeking housing options in what is looking to be a crowded housing market for the foreseeable future.
Solano County
Based on recent market data compiled by Realtor.com, the Solano County real estate market was the third most active in the entire country during March based on the number of property showings, the transaction rate and number of active listings. The Solano County market is currently seeing an elevated level of competition amongst potential buyers and renters. Although there are tons of tenants looking for housing options, there is simply a significant shortage of available housing units. Real estate investors who locate promising multifamily properties would be ideally positioned to charge premium rent prices and select amongst well-qualified, reliable renters. This scenario translates into sustainable passive income and more money to fuel your long-term investment strategy.
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The time is now to get involved in the booming Northern California real estate market. With a wide range of custom-tailored funding options and a client-centered approach, Security Financial Services can provide you the capital you need to take your investment business to the next level. Contact us today to get started!