Those who live in or own property in the Los Angeles area have seen the market continue to rise year after year. This has become the norm in LA, San Francisco, and many of the larger cities throughout California.
The current housing shortage and low-interest rates have created a frenzy, with investors buying up as much property as they can afford. But will it continue, or are the LA, West Hollywood, and high-end Beverly Hills going to experience a crash? While a crash is unlikely, it would be nice to see real estate prices level out and create new opportunities for those purchasing homes.
Is the National Housing Market Going to Experience Another 2008?
When we experienced the housing financial crisis in 2008, people were given mortgages without lenders properly vetting home buyers. This led to the growth of the subprime mortgage market, according to Investopedia.com. The devastation was not limited to the California market; it was nationwide. This was one of the most shattering events in the country’s financial market history. In all, across the U.S., over 10 million people lost their homes from 2006 to 2014.
LA Real Estate Market Today:
According to Fortune.com, interest rates are still somewhat low, though we have seen some increases over the last 24 months. This means loans and mortgages are higher than just a few years ago. These higher rates may deter Real Estate investors, but not all of them. Some investors like Steven Taylor, an LA investor, understand the market and have successfully invested in properties in and around the LA market.
According to DoorLoop.com, the median home price in LA is around $928,000, around $600,00 more than the U.S. median price. This has increased by about 16.7% in the past year. The number of home listings decreased by about 22.4%; new listings are hovering around 22.4%.
The California Association of Realtors believes that slower economic growth and lowering of inflation may cause mortgage interest rates to be lowered or at least remain consistent throughout 2024. The group’s “2024 California Housing Market Forecast” states that single-family homes will increase. The organization reports that they anticipate a favorable market for borrowers and more homes for sale. These market conditions are good news for investors like Steven Taylor in Los Angeles.
One thing we can count on is that people will continue to be drawn to the state of California, and the LA, Beverly Hills, and Hollywood areas will continue to be hubs for business and real estate developments. With the growing population, more homes will be needed in the key cities and outlying areas.
The outlook for 2024 may be favorable for those looking to purchase existing homes or invest in real estate. The expected leveling of interest rates and continued need for homes may be positioning Los Angeles and the outlying areas for continued growth at more affordable prices than we may have seen in a few years.