Just as top financial executives are saying they are pessimistic about the U.S. economy over the next year, the Los Angeles area is reporting significant growth in home prices. In fact, a recent report has found that the Los Angeles area had among the highest growth in home prices among top metro areas during the month of January while other reports have found that more than one-third of top financial executives are pessimistic about the U.S. economy.
Exploring the Future of the U.S. Economy
According to a recent survey of CEOs, chief financial officers, controllers and other senior managers that was conducted by the American Institute of CPAs, the majority of respondents feel pessimistic about the state of the U.S. economy over the next 12 months. While 28 percent report feeling good about the economy’s future, these figures are down by 17 percentage points when compared to one year ago.
Survey respondents have indicated that they are concerned about slow growth, the impact of low oil and commodity prices, stock market volatility and the general upheaval in the global economy. Furthermore, the U.S. economy now tops regulatory requirements as the top challenge for companies.
The survey also found that business executives are feeling less optimistic about their own companies, with only 44 percent reporting that they feel bullish about their prospects. This represents the first time this figure has dipped below 50 percent since 2012. Interestingly, the survey found that executives in the West are more bullish than executives in other regions, while those in the South were the least optimistic. Those executives representing technology, construction and real estate were the most optimistic while those working in the retail trade, manufacturing, finance and insurance areas were the least optimistic.
Los Angeles Home Prices on the Rise
Just as executives are expressing concerns about the economy, housing prices in Los Angeles are growing so fast that they are among the fastest-growing of all top metro areas. Altogether, home prices in the Los Angeles-Long Beach-Glendale area increased by 7.2 percent in January when comparing year-to-year data. Prices also increased by 1.8 percent when compared to December. The same survey found that Denver had the highest growth at 11.8 percent while San Francisco posted the second highest growth with 11.6 percent growth. Miami came in third with a 7.8 percent increase in home prices.
When looking at the entire state, California experienced an 8.1 percent increase in home prices in January when compared to the previous year. Meanwhile, Washington saw the highest growth at 11.6 percent, Colorado came in second at 10.9 percent, Oregon came in third at 10 percent and Florida came in at 9.1 percent in growth. Nationwide, home prices increased by 6.9 percent when comparing January 2016 to a year ago, with a month over month increase of 1.3 percent.
Given this data, combined with the fact that rates are still low and the country is generally experiencing solid job and income growth, most experts expect the spring real estate buying season to be a good one.
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(all data current as of 7/24/2017)
Listing information deemed reliable but not guaranteed. Read full disclaimer.