California is a popular destination for people who want to enjoy the sunny climate, warm beaches, diverse landscape, and laid-back vibe of the Golden State. With over 39 million residents, there are many opportunities for outdoor activities, food, state parks, and employment. However, not all cities in California are worth investing in. According to Yawar Charlie, a senior real estate agent based in Los Angeles and a director of Aaron Kirman Group’s estates division, as well as a cast member of CNBC’s Listing Impossible, “When it comes to real estate, not all that glitters is gold — especially in California.”
Charlie, a real estate expert, has warned investors to be cautious before investing in certain cities in the next five years. He has identified several cities that may have their own attractions but also come with significant risks from a real estate investment perspective. So, if you are planning to invest in real estate, you might want to think twice before investing in these cities.
As per his words, it’s crucial to keep in mind that when it comes to real estate, one should not only focus on finding the property with the lowest price tag but also consider factors such as its value and potential for growth.
Stockton
He stated that Stockton is still facing the challenge of high crime rates and economic instability despite the ongoing efforts to revitalize the city.
Southbay Moving Systems reports that the city’s crime rate is 81.5% higher than the average in the United States and 65% higher than California’s average. Charlie, from the real estate industry, warns that the market in this area is notoriously unstable. Although there is potential for long-term growth, the risk of investing here is significant. It’s like betting on a long shot at the Kentucky Derby.
Bakersfield
Bakersfield, situated north of Los Angeles and at the southern end of the San Joaquin Valley, is home to over 400,000 people due to its affordable cost of living. Nevertheless, purchasing a property is not solely determined by its low cost.
Charlie explained that Bakersfield’s economy is heavily reliant on oil and agriculture, which are both vulnerable to market fluctuations. Although the area is affordable, it has faced environmental issues and a lack of cultural amenities, which could potentially affect the desirability and property values. Investing in Bakersfield can be likened to riding a rollercoaster – an exhilarating experience, but one that requires a firm grip.
Modesto
Modesto, located in the Central Valley of California, is a great place to live with affordable housing options that are 84% lower than the state average. In addition, the cost of goods and services in Modesto is 30% cheaper compared to the rest of the state.
Charlie pointed out that while the city of Modesto has its benefits, there are also some drawbacks to living there. He mentioned that the high crime rates and limited job opportunities can make it a less attractive option for both new residents and investors.
Neighborhood Scout reports that Modesto ranks among the top cities in the United States with high crime rates. The chances of falling victim to either violent or property crime in Modesto are one in 30.
Charlie warns that there are additional factors to keep in mind before making a decision to purchase property in Modesto.
“The city’s progress has been sluggish, and if there is no major boost in economic development, the value of properties might face stagnation. It’s comparable to observing paint dry, but without the prospect of an exhilarating outcome.”
Fresno
Fresno is renowned for its diverse agriculture and produces a range of crops including grapes, tomatoes, citrus fruits, and almonds. Despite its numerous attractions for residents and tourists, Charlie advises against purchasing property in this city.
He remarked that despite being a major city in California, Fresno faces the challenge of high rates of unemployment and a scarcity of well-paying job opportunities. The city’s housing market has also been unstable, and its future growth prospects are uncertain. Investing in this area could be akin to swimming against the tide.
San Bernardino
Located in the Inland Empire region of Southern California, San Bernardino is a budget-friendly suburb of Los Angeles. However, the city is currently facing several issues that continue to impact its residents.
Charlie pointed out that San Bernardino has faced various challenges, including a bankruptcy filing in 2012 due to financial difficulties and cash shortages. Despite efforts towards economic recovery, the city still grapples with a struggling school system and high crime rates, with a one in 23 chance of becoming a victim of violent crime. Investing in such a city could leave one feeling more stressed than blessed, Charlie emphasized.