The Standard & Poor’s/Case-Shiller Index is reporting that increases in home prices in Los Angeles County are outpacing the national rate. Not only are prices higher when compared to one year ago, but they have also been increasing from month to month. As such, buyers who are interested in purchasing luxury property within Los Angeles County and the surrounding area may want to consider making a purchase soon before prices soar even higher.
Los Angeles Home Prices Outpace National Rates
According to the Standard & Poor’s/Case-Shiller Index, home prices in Los Angeles County increased by 6.3 percent when comparing June 2015 to figures from the same time last year. During this same time period, home prices increased much less on the national level at a rate of just 4.5 percent. Even this rate, however, is two to three times the rate of inflation.
Of course, Los Angeles County isn’t the only part of the country that is experiencing a much faster rate of home price growth. Other areas that are experiencing rapid price increases include San Francisco, Denver, Washington DC, New York and even Cleveland, though San Francisco and Denver are experiencing much faster rates of increase than the other areas. Furthermore, city-to-city price patterns remain pretty consistent throughout the country, with price gains also remaining consistent as the unemployment rate drops.
When analyzing the composite index of the top 10 cities, the Standard & Poor’s/Case-Shiller Index found that there was a slight drop in year-over-year gains with an increase of 4.7 percent in May followed by a 4.6 percent increase in June. The 20-city composite year-over-year pace showed virtually no change, with an increase of 4.9 percent in May and 5 percent in June. Among the 20 cities included in the composite index, Denver, San Francisco and Dallas experienced the greatest gains. Denver increased by 10.2 percent while San Francisco increased by 9.5 percent and Dallas increased by 8.2 percent.
Housing Starts and Sales
In terms of housing starts and sales, the Standard & Poor’s/Case-Shiller Index found that both have improved over the last few months. In July, sales of existing homes reached 5.6 million, representing the strongest they have been since 2007. Housing starts have also improved, with the figures topping out at 1.2 million units, with nearly two-thirds of those being single-family homes. Sales of new homes are also experiencing an upward trend, all of which indicates that the housing sector is strong. Not only is this important in terms of making an investment in luxury real estate, but a strong housing sector also provides great support to the local economy.
Looking Toward the Future
While Los Angeles County is experiencing rapid price growth within the housing sector coupled with a significant amount of demand, there are some possible roadblocks in the future that could cause some issues. One of these potential problems is an interest rate increase, while the other is the impact of a volatile stock market. A simple stock market correction is not likely to have much of an impact on the housing market, but a full-blown bear market that drops by more than 20 percent could result in some problems within the housing market as well as other aspects of the local economy.
If you are ready to purchase a luxury home before prices climb even higher, contact us today. We are a luxury real estate company who specializes in exquisite properties throughout Southern California.
Look into these properties below priced from $4 Million to $6 Million.
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(all data current as of 11/20/2017)
Listing information deemed reliable but not guaranteed. Read full disclaimer.