Investing In California Real Estate? Here Are A Few Things You Should Know

The overriding consideration in the big California markets this year is how long you plan to be invested. If you're a home builder or rehabber who will finish your project soon, if you're a speculator who will flip an acquisition, if you plan to split a property into several rental units or condos, if - in other words - you have an investment horizon of only a couple of years, now is a great time to invest in California property.

On the other hand, if you're a builder with a multi-year project, if you plan to buy and hold rental property, if you're investing with the intention of selling out after five years or so, be very wary of getting into LA or San Diego or the Bay area right now.

And if you already hold property and are looking for a good time to sell, you should start the process.

It's not so much that home prices are in danger of falling anytime soon - at Local Market Monitor we're forecasting that prices in all California markets will rise over the next three years - but that the risk of prices peaking and then falling will increase sharply every year. You never know what will trigger the end of a boom - or exactly when - and that's what many California markets are in right now.

Forbes