Happy House Hacking Podcast EP 35: Is Your Future on the Central Coast?

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Is Your Future in Central Coast California Real Estate? 

The Central Coast California real estate market is shifting, presenting a landscape of promising opportunities and significant challenges. Whether you’re a seasoned investor, a first-time homebuyer, or a homeowner, understanding these factors is crucial for making informed decisions. 

At The Schwaegerle Team, we're committed to providing you with the most current insights to navigate this dynamic market. In our recent Happy House Hacking podcast episode, we dove into the 2025 real estate market forecast, addressed the critical California home insurance crisis, and shared real estate success stories. 

The 2025 Central Coast Property Market Forecast

To understand what lies ahead, it's essential to examine the specifics of the Central Coast property market in 2025. Here are some current trends and forecasts to help provide a clear picture of what buyers and sellers can expect. 

Increased Inventory 

Owen Schwaegerle shared, "The good news right now in California is the Association of Realtors...are coming out with their forecast for the year. And it looks like we're going to have more houses selling this year.” The industry anticipates a projected 10% increase in California housing options for 2025. 

This surge is primarily driven by two factors:

• The diminishing "rate lock effect," which is encouraging homeowners to list their properties
• The influx of new construction developments entering the market 

Owen described it as going to Costco and discovering a new aisle of products added to the market. This expansion of available properties offers buyers a wider selection and more opportunities to find their ideal home within the Central Coast property market.

Price Projections

While the increase in inventory is a positive development for Central Coast California real estate, Camille Schwaegerle cautioned, "Although we're going to see an increase in inventory...that doesn't mean that price is going to go down completely. We are still projecting that home prices are going to increase by about 4.5%." 

This steady appreciation indicates that waiting for a significant price drop on the Central Coast is unrealistic. The desirability of the region, coupled with ongoing demand, is expected to maintain upward pressure on home prices.

Mortgage Rates in California and Affordability

Examining the impact of mortgage rates in California on affordability is critical for anyone considering a move to or within the Central Coast California real estate market. Fluctuations in these rates directly influence purchasing power and overall market accessibility. 

Projected Mortgage Rate Changes 

Owen noted, "Mortgage rates are projected to come down a little bit," with expectations of rates potentially dipping into the low 6% range, or even 5.9%, by the end of 2025. This forecasted decrease in mortgage rates in California is poised to have a positive impact on affordability, making homeownership more attainable for a larger segment of the population.

Affordability Crisis

Camille highlighted the severity of the affordability crisis in California, stating, "Affordability has decreased by 50% in the last five years," with only 16% of Californians currently able to afford a home. 

This stark decline is largely attributed to the rapid rise in mortgage rates. "It needs to be a top priority to change that for our state," she emphasized, underscoring the urgency of addressing the need for affordable housing in California.

Affordable Housing in California

California is focusing on increasing housing development to improve affordability and alleviate the housing crisis. "The way we're going to make houses more affordable is just by building more of them," Owen explained. 

This includes promoting denser development with townhouses and smaller lots to accommodate the growing population. Increasing the supply of housing units makes homeownership more accessible to its residents and offers affordable housing solutions in California.

The California Home Insurance Crisis

The evolving California home insurance crisis presents a significant factor influencing the Central Coast California real estate market. Owen acknowledged, "California has had insurance issues for years now.” 

Factors contributing to the crisis include the increasing frequency and severity of wildfires, past policy decisions that capped premium increases, and the resulting increased risk exposure for insurance companies. The recent devastating wildfires in Los Angeles have further exacerbated the situation.

Impact on Homeowners 

Homeowners can expect to see a substantial increase in insurance premiums due to the California home insurance crisis. "You're just going to see your premiums increase, increase, increase," Camille warned, citing increases of 400% for some of her clients. Additionally, there is a growing risk of policy non-renewals and cancellations.

Mitigation Strategies

Given the challenges presented by the California home insurance crisis, proactive measures are essential. Here are several mitigation strategies homeowners can employ:

• Budgeting for higher insurance costs
• Using tools to assess fire risk and flood zones
• Creating defensible space around properties
• Maintaining properties to prevent non-renewal
• Reviewing insurance policies and trusts
  
  

Client Success Stories and the Importance of Buyer Consultation

Real-world experiences provide invaluable insights into navigating the Central Coast property market. Strategic planning and comprehensive buyer consultation are critical in achieving successful real estate outcomes. 

Narrative of Client Experiences

Camille shared a compelling client success story that highlighted the importance of being prepared in a competitive Central Coast property market. Clients who initially missed out on a property due to a lack of pre-approval learned from their experience and ultimately secured their dream home. Experience, confidence, and proactive engagement are crucial in the home-buying process.

Importance of Buyer Consultations

Owen explained, "Getting in the market, meeting with your agent, getting that pre-approval, touring homes, going to open houses, all of that is part of the buyer journey”. Early buyer consultation and pre-approvals are essential for setting buyers up for success in Central Coast California real estate. 

The Schwaegerle Team strongly encourages potential buyers to start the process early and work with experienced real estate professionals who can provide expert guidance and support.

Your Next Steps in the Central Coast Market

The 2025 Central Coast California real estate market presents a mix of opportunities and challenges. The projected increase in inventory and potentially lower mortgage rates in California offer favorable buying conditions while rising home prices and the ongoing California home insurance crisis require careful planning and strategic decision-making. 

At The Schwaegerle Team, we understand that navigating the complex Central Coast property market can be daunting. We are here to provide expert guidance, personalized strategies, and unwavering support to help you achieve your real estate goals. 

Listen to the rest of our Happy House Hacking podcast for more real estate market insights!