Los Angeles has a market that is continuing to move forward despite its share of problems, a shortage of space and rising prices that are still reaching new records. The median price for single family homes in Los Angeles rose 24.3% to $ 459,660 just shy of the median price of $ 465, 540 for the state of California that also saw a 21 percent increase. Los Angeles is still a growing market made up of several sub markets: Burbank, Long Beach, Hollywood, Santa Monica, and Beverly Hills just to mention a few.
Prices and sales for homes have been growing at an alarming rate. There are more people looking for housing than is available. Vacancy rates for rentals in Orange County have reached a negative “5% for the first quarter.” The homeless population is still gaining ground while available space for development is shrinking and homes have continued to appreciate at rates in the double digits.
In the land of swimming pools, Rodeo Drive and movie stars there’s more that makes tinsel town, Los Angeles go round and round and one of them is the median price of a house, the value of real estate.
“Prices for single family homes in Los Angeles, Orange County CA have continued to ride “a roller coaster ride.”
At the end of last year the National Association of Realtors reported a 6.9% increase in sales of existing homes, translating to 6.47 million annually at a seasonally adjusted rate. The national median price for a home in December of last year was $173,000 up 6.7%, the median price for a home in Los Angeles was close to $350,000. The current median reflects a significant increase but “ the typical consumer in Los Angeles can only afford 68%” of a median priced home. Prices in California continue to rise, sitting at some of the highest medians in the country: San Diego at $573,080, Riverside at $396,180, and the San Francisco Bay area at $642,360.
Los Angeles tells a similar story as do the other markets that make up California. Rising population along with a decrease in available property is not only creating an active market but developments to keep pace with it, all across the board.
Although Los Angeles boasts a healthy market and plans to see continued growth in 2005 there are still some things that low interests rates and more prospective buyers won’t satisfy. There’s an overall housing shortage in Orange County despite the increase in sales and developments. Unfortunately even a growing ethnic market, “inner city minority communities" that are “beginning to prove their value don’t say much for a situation where “the $1400 average rent is the highest in the region” and those who are stuck renting will undoubtedly stay that way until “the market flattens and personal incomes rise,” something that is not expected to happen anytime soon.
The growing number of young professionals and working families who have seen a gradual rise in their incomes and buying power are still poised to take advantage of low interest rates to buy homes.
With a wide variety of housing options in Los Angles those who can afford to shop around will continue to do so, buying into a market that’s already overpriced while hoping to reap the benefits of continued appreciation.
Things have been good for a long time now, maybe too long. With continued increases in prices and sales for over four years the 3.9 % decrease in sales for the Los Angeles market in Sept compared to last year won’t deter buyers who want to make the most of an opportunity. Analysts have already warned that what goes up must come down but thankfully the Los Angeles market continues to be infused with growth in population and development that could sustain the increases in prices and sales and not ”bottom out,” dramatically decline as they did in the early 90’s.
At least that is what everyone would hope for but most are still waiting to see if the growth in population, earnings and continued development will support itself over the long hall.
Many fear that the bubble is about to burst, they just aren’t sure exactly how and when.