For years now, the Joshua Tree real estate market has been considered a good place to find investment opportunities. But what about the current state of the market? Should you invest in Joshua Tree real estate today? We’ll dive into a real estate market analysis to help you answer this question.
Related: Investing in Joshua Tree Real Estate: An Unexpectedly Good Opportunity
Joshua Tree Real Estate Market – Overview
Joshua Tree is a census-designated location in San Bernardino County, California. The name ‘Joshua Tree’ is derived from the Joshua Tree itself, a fibery, fast-growing yucca palm that is common in the Mojave desert. The current population of the town is 6,980. The average household income is $51,024, while the poverty rate is 24.58%.
A Quick Overview of the California Housing Market – Home to Joshua Tree
Before we discuss investing in the Joshua Tree real estate market, let us look at the current state of the California real estate market. With a population of almost 40 million, California is the most populous state in the US. With industries ranging from agriculture, technology, and entertainment, to finance, health and manufacturing, California boasts the largest economy in the US. The median household income is $71,228.
When coronavirus hit, the state experienced unemployment rates that surpassed the Great Recession rates. Recent data reveals that most job losses occurred in April and May, with unemployment rates reaching as high as 16.4%. Due to the shutdown and stay-in-place orders, there was a sharp drop in home sales. According to the California Association of Realtors, home sales dropped by more than 35% compared to 2019.
However, as the COVID-19 numbers in California are going down, the economy is now slowly recovering. Here is an overview of the California housing market trends:
- High rental demand – Since home prices are still very high around California, most people are forced to rent.
- Lack of inventory – California State has very strict policies on housing developments. As a result, there are very few affordable homes available.
- COVID-19 eviction moratorium – In August 2020, legislation was passed outlawing the eviction of tenants before February 2021 due to coronavirus-related hardship. This has placed California landlords in a very difficult position. Due to the outstanding rents, many landlords cannot pay workers or make repairs and renovations on their real estate investments.
- Urban flight – Since the pandemic, more and more people are relocating from big cities to smaller towns or suburbs. Factors behind this trend include the quest for affordability and the ability to work remotely.
When looking for a place to invest in California, you need to look at three things; affordability, population growth, and job growth. So, is Joshua Tree a good place to buy property in California?
Is Joshua Tree Real Estate a Good Investment?
Is Joshua Tree one of the best places to invest in California? According to the following trends, it can be.
High Renter Population
Joshua Tree real estate trends from NeighborhoodScout show that around 50% of the residents are renters, with 86% of the homes in the Joshua Tree housing market being single-family units. Ultimately, local landlords benefit from the high renter population as they enjoy demand for their properties and good occupancy rates. High demand also allows landlords to charge higher rents.
Increasing Property Values
Zillow reports that property values have appreciated 9.3% over the past year, and are expected to increase by 6.5% from now through 2021. This real estate appreciation indicates that Joshua Tree properties are a hot commodity – buy one now and you can benefit from this appreciation next year.
A Seller’s Market – But You Can Still Find Deals
Zillow also reports that the Joshua Tree real estate market is a warm seller’s market. However, Redfin rates the Joshua Tree CA real estate market as ‘somewhat competitive’. While some homes in Joshua Tree real estate get multiple offers, others end up selling for about 2% below listing price. This means that, although you will be met with some competition, you may still get a deal on a Joshua Tree property for sale.
Related: Buying Property vs. Buying Land in Joshua Tree: Which One Is the Best Investment Strategy?
Good ROI for Traditional Investments
Buying a Joshua Tree investment property and using it as a traditional rental will definitely bring good returns, based on Mashvisor’s data. Here are the returns you can expect from a traditional Joshua Tree investment property:
- Median Property Price: $401,140
- Price per Square Foot: $300
- Price to Rent Ratio: 35
- Traditional Rental Income: $944
- Traditional Cash on Cash Return: 1.1%
Good ROI for Airbnb Investments (and It’s Legal!)
Airbnb Joshua Tree real estate actually makes for a great investment!
Due to the booming tourism industry, an Airbnb Joshua Tree investment property can be very profitable. The influx of visitors from all over the world can be largely attributed to the nationally-renowned Joshua Tree National Park. With its amazing variety of animals and plants, as well as surreal geographical features, this park continues to be a major attraction. The park attracts over 2 million visitors each year. Popular recreation activities in Joshua Tree National Park include camping, hiking, climbing, bird watching, and astronomy.
Here are some figures from Mashvisor’s data that reveal the kind of returns Airbnb investing in the Joshua Tree real estate market can bring:
- Airbnb Daily Rate: $218
- Airbnb Rental Income: $2,676
- Airbnb Cash on Cash Return: 4%
- Airbnb Occupancy Rate: 55%
Related: What’s the Deal with Airbnb Joshua Tree?
To operate an Airbnb Joshua Tree real estate rental, you will need to obtain a short-term rental permit, as well as a Transient Occupancy Tax (TOT) certificate from San Bernardino County. In addition, you must adhere to the strict Airbnb regulations. Code enforcement inspectors have been cracking down on properties with safety and building violations. Joshua Tree Airbnb laws require you to have the following in order to pass inspection:
- CO and smoke detectors in all bedrooms and hallways
- Power failure emergency lights
- Fire extinguishers on each level
- Animal-proof trash cans
- Onsite parking available
- Compliant plumbing, mechanical and electrical systems
You are also required to display signage for guests with information such as the maximum number of vehicles, maximum occupancy, a property boundary map, trash removal information, and emergency contacts.
Find Profitable Joshua Tree Real Estate Now
Joshua Tree real estate clearly makes for a good investment, even during COVID-19.
Do you want to invest in Joshua Tree real estate before 2021? You can use Mashvisor’s property finder to locate the top-performing Joshua Tree rental properties for sale based on your investment goals and search criteria. This tool uses the latest AI technologies and machine-learning algorithms to generate a list of homes that will give you the best return on investment. The results generated will show you Joshua Tree real estate for sale that will give you the highest returns based on traditional and Airbnb cash on cash return and a few other key metrics.
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