There’s a couple of words for the Los Angeles housing market: Warming up.
According to Zillow, home values in the city have risen nearly 10 percent over the past year and are expected to continue to climb by 7.7 percent over the next 12 months.
The median list price of a home in Los Angeles is $795,000, while the average sale price is $713,400. Home buyers are being priced out of the single-family detached market and are opting for condos or townhouses. The average price for a multifamily home in the state is $476,000, an increase of $40,000 from last year.
Home sales in the Los Angeles Metro Area grew by 2.3 percent last month and prices of condos in downtown Los Angeles are reportedly up by $90.000 when compared to last year. In order to qualify to buy a home in LA, you’ll need an annual income of $120,000.
California and Los Angeles, in particular, continues to be a sought-after place to live because of its climate, topography, high-paying jobs, unique lifestyle and recreational opportunities.
What else is the driving force behind this growth? Los Angeles has a below-average number of homes on the market that are available for either buyers or investors. MLS data shows that there was a 2.1-month’s supply of homes on the market in June of 2017. A balanced market would have about a 6 month’s supply. New home construction is currently not keeping pace with demand and many realtors are wondering how to entice people to sell their homes. Many millennials, anxious to start families and have a home of their own, have saved up healthy down payments only to be stymied in their quest by this lack of inventory. There will continue to be upward pressures on home prices in LA for the foreseeable future as population growth outpaces the available supply of homes, whether they be new construction or resales.
It all boils down to this: Numerous forecasts and predictions for the LA real estate market postulate that while home prices will continue to climb over the next couple of years, those gains will be less than what has occurred over the past few years. This leaves sellers with the advantage when it comes to sitting down at the negotiating table.