A good indicator of a strong local market is the uptick of home prices. Noting a demand that is fueling higher home values and buyers willing to shell out the dough for those prices, it’s always good news when a certain city is showing home prices increase, especially when it’s at a slightly faster pace than expected. That’s the case in Los Angeles where homes saw both a monthly and yearly gain.
According to the S&P/Case-Shiller index of property values, Los Angeles saw a monthly gain in February of 0.75 percent coming off a previous monthly loss of 0.31 percent in February. Looking at yearly gains in Los Angeles, home values increased by 5.77 percent. In the nation, the index found that home values increased by 5 percent in February over last year’s figures, which was the biggest annual gain reported since August.
“Given the acceleration in U.S. housing demand in the early stage of the spring selling season, our expectations are that the strengthening of demand is sustainable and should drive better new home sales for all of 2015,” said Richard Dugas, chief executive officer of homebuilder PulteGroup Inc. said in an April 23 earnings call.
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In Los Angeles, the demand for homes is strong and increasing regularly. Altos Research, a California-based real estate analytics company, uses a unique metric called the Market Action Index to determine whether conditions are trending in favor of home buyers or sellers using a scale that values 30 as neutral. The index was reported at 45.84 in Los Angeles as of April 24, showing that sellers have a fairly strong upper hand in this market where buyers are eager to get a piece of property.
“There’s a combination of factors that are pushing prices higher — one is that there’s some demand for housing, and also there hasn’t been much of a rise in inventory,” said Ryan Wang, an economist at HSBC Securities USA Inc. in New York. “Prices are rising moderately, and we’ll probably continue to see that for the rest of the year.”
A tight supply of homes is a major factor in the home price increases taking place throughout the nation and in Los Angeles. According to the National Association of REALTORS®, at the current pace of sales it would take about 4.6 months to sell the 2 million existing homes for sale in March. This is just slightly lower than what’s considered an average and healthy supply of about a five- to six-month supply of homes.
Currently in Los Angeles, homes are selling in about 91 days and this figure continues to fall in both the 90-day and seven-day averages. There are about 1,732 homes listed for sale in Los Angeles, but this figure is increasing slightly as more people have confidence in the ability to sell their homes.
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(all data current as of 11/22/2017)
Listing information deemed reliable but not guaranteed. Read full disclaimer.