The median home price in Los Angeles Country jumped by 5.9 percent in March, although the number of homes sold in the county fell by 1.4 percent, reflecting a real estate market defined by high prices and diminishing inventory, according to data released by the real estate information service CoreLogic.
According to CoreLogic, the median price of a home in Los Angeles County was $506,000 last month, up from $478,000 in March 2015. A total of 6,610 home were taken off the market in March, down from 6,706 sold in March 2015.
With the inventory of available homes diminishing and prices still increasing, there’s a frenzy among buyers to grab a piece of Los Angeles County’s real estate market while there’s still time. Even so, economists expect that home prices will rise less rapidly in 2016 than in 2015 as many buyers have already been priced out of the market.
The furious bidding wars that marked 2015 will likely become less and less common as fewer buyers are left to compete for the remaining stock of homes in Los Angeles County. According to the California Association of Realtors, only 27 percent of Los Angeles county households could reasonably afford to purchase a median-priced home at the end of 2015, and prices are still rising, although more slowly.
High prices are making it hard for young families to purchase a home, although they have had the welcome benefit of wiping out the legacy of the foreclosure crisis and increasing existing homeowners’ equity. Many older American homeowners are choosing to stay where they are rather than “downsize,” and builders have not yet started building new homes at previous levels. Those factors have held back new listings and increased competition for existing homes in Los Angeles County and across Southern California.
But older Americans and builders are not all to blame. California’s history of underbuilding, preferring quality over quantity, is finally catching up with homebuyers in the Golden State. Home prices have always been higher in California than in other parts of the country, and particularly so in Southern California and Los Angeles County, thanks to a historic undersupply of homes.
According to Sacramento’s independent Legislative Analyst’s Office, California would have needed to build millions of more homes over the last 30 years to keep prices in line with the rest of the country.
Across Southern California, the real estate market is red-hot. The median home price in the six-county region increased $19,000 between March and February. High prices in Los Angeles County may be driving some buyers to sight their sights elsewhere in Southern California. In March, the relatively affordable Inland Empire area accounted for 30 percent of all sales in the region. It seems that some of the fierce competition between homebuyers in Los Angeles County during 2015 has moved out to surrounding counties as more buyers have been priced out of the most desirable market.
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(all data current as of 5/29/2017)
Listing information deemed reliable but not guaranteed. Read full disclaimer.