Willy @ The Real Estate Project

     I'm asked this question all the time by investors. I even ask myself it. No one knows for sure what is around the corner. Real estate is a constantly changing environment. Market values can increase and decrease within 30 days. Seasonal changes will also affect real estate.   
     From my experience, real estate goes in 7 to 10 year up and down cycles. Other influences like Presidential elections and local elections can affect real estate. Uninformed voters have voted in taxes thinking that they were doing the right thing or having been mis-lead into thinking that they were voting for something that was going to benefit them. Case in point, the recent increase in sale tax in Los Angeles County. This is something that the "people of Los Angeles" voted for. As a result some cities in LA County now have a sales tax that is over 10%. Other cities are not far off from that. And then you have the politicians in some cities and at the State level who recently approved to add a real estate transfer tax to all real estate transaction. This was done in the name of reducing and providing homes for the homeless and those who are considered "low income" aka "Section 8" recipients. 
     The new real estate tax that will be added to all real estate transactions is surely to affect real estate here in California. And as a result will affect those who invest in real estate. This added tax will also have an affect on market values. I'm not sure which way the values will go except maybe upward as sellers will attempt to cover this new expense that they will have to pay for. I'm sure many sellers will try to shift the costs to buyers. And as a result this may push buyers to request increased assistance with closing costs from sellers. Anyways, when it comes to investors, they will surely increase their asking prices and also look to doing business in other states.