As we start the New Year, many are optimistic for what the future holds for LA's housing market. Looking back at 2017, the market reached an all time historical high, breaking records much like the previous increase seen in the 2007 mortgage crisis. For this reason, many speculate that we're in a bubble, however, a recent report from CoreLogic showed the prices of Southern California homes to be 13% below their pre-recession peak, after being adjusted for inflation. What does this mean for real estate in LA? For buyers looking to make their purchases, the 6.4 percent increase in the predicted prices in the county (by CoreLogic), isn't the most compelling news.
Eric Sussman, professor of real estate and accounting at UCLA, states that high demand, an abundance in competition, and most importantly, a lack of supply are all factors contributing to the sustaining prices. "There are just not that many homes on the market," Sussman says, while emphasizing that a dominant rental market is causing home owners to keep their properties in lieu of selling. He believes there's little cause to foresee prices to bottom out anytime soon.
For Sellers, this period is as good as the golden era. With lucrative prices reaching historical highs, Sellers were able to capitalize on their profits, getting maximum equity for their investments. As the current bullish real estate market moves in favor of those looking to off their properties, there are many who have already taken advantage of the current situation, that's been so ripe with opportunity.
In the end, whether your a buyer or seller, the most important question is, "how much longer will home prices continue to rise?" "Trees can only grow so high," Sussman states, finding the question difficult to answer.