After several years of ups and downs, it looks as though the Southern California housing market has finally settled to stable conditions. Home prices continue to increase, however gains have slowed from the frantic pace that they were at last spring when a frenzied population of buyers helped to drive local home prices through the roof. Sales continue to lag a bit, mostly due to the fewer foreclosures that are flooding the market, however more home sellers are slowly coming to the market, testing the waters.
According to the California Association of REALTORS®, these signals are pointing to a stable, healthy market pattern where prices continue to appreciate, but the competition is easing up allowing some home buyers and sellers to relax a little bit.
“The market’s not bad,” Leslie Appleton-Young, chief economist for CAR, said to the LA Times. “The urgency’s gone. I think that’s a positive thing. I really do.”
DataQuick, a San Diego-based real estate information firm, reports that the median price of homes sold in the six-county Southland area was $410,000. This is up 11.4 percent from May 2013 and is the slowest annual gain since August 2012. May prices gained a steady 1.5 percent on April prices.
Sales fell 15.1 percent, however economists point to a dramatic decrease in investor activity in foreclosures and distressed homes on the market.
Southern California Inventory Makes Gains
While lending standards remain tight and the economy makes small but soft gains, home buyers are getting more realistic about what they are willing to pay and this is having an effect on the price of homes listed.
“We’re bumping along a ceiling. I really can’t see values going up much more,” Steve Thomas of ReportsOnHousing.com, said to the LA Times. “Buyers are homing in on trying to pay a fair value. A year ago, every one was willing to pay extra. Now that bidding up is not happening.”
This is excellent news for buyers as home prices are appreciating at a more manageable rate for the buyer. Even though sales have declined, more traditional home buyers are coming to the market with a stronger arsenal as the inventory for homes for sale is growing.
According to Altos Research, a California-based real estate analytics company, Los Angeles saw a recent swell in inventory to 1,684 properties. This is a very small gain and is probably hardly noticeable as the average days on market is a blistering 82 days. This means that the limited amount of properties that are actually making their way to the market are being snatched up in less than three months.
Altos shows that this value is falling, meaning that properties will move even faster. Economists point to the hope that inventory will continue to come to the Southern California market, making for even more stable conditions in the coming months.
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(all data current as of 11/24/2017)
Listing information deemed reliable but not guaranteed. Read full disclaimer.