With continually rising home prices in Los Angeles, many people are asking: Is 2017 the year the scorching LA market finally starts to cool? Home prices in LA have risen steadily and significantly over the past few years. There are recent market predictions that indicate that this rise may start slowing in the coming months.

Much of the conversation throughout the LA real estate market focuses on whether markets throughout California may finally be reaching the peak of affordability. Almost all 2017 market forecasts show much more conservative numbers than was seen in 2015 or 2016. This indicates that the market may experience an even higher level of cooling than initially expected.

Economists at the real estate information company Zillow predicted that Los Angeles home values will increase by just 1.7 percent between now and November 2017. That would mark a significantly slower rate of appreciation than what was experienced over the past two years.

This is not just the case in Los Angeles. Market forecasts throughout many of California cities are predicting the same cooling trend. Throughout the entire Golden State, real estate markets are expected to see some degree of a downtrend during the next several months. The degree of cooling is yet to be determined.

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While a cooling trend sounds like a bad thing, is there an upside? If the market slows as is suggested, this means that the value of homes will all rise more slowly over the next year. This trend might help to ease the worries of many real estate professionals about a potential price bubble. With the bursting of real estate bubbles throughout the United States, residents and real estate professionals alike fear a burst of the LA market. A year of cooling might help take some of the pressure off of the LA market before it experiences the negative effectives of the bubble.

As it becomes increasingly more difficult to buy into the LA market as a first-time homebuyer, this cooling might help make home buying more achievable than in past years. Although the prices may not see the record-breaking pace of the past two years, this will have minimal impact on the shortage of homes in the Los Angeles area.

Many people are optimistic that this combination of slowing home sales, increased desire for homes and home prices increasing more gradually might help loosen some of the restrictions. The hope is that this might help spur on regulatory changes that will allow for revamped building regulations that would turn decaying parts of the city into hip new residents. A veritable win-win for home buyers and investors.

To learn more about Southern California, including real estate opportunities, contact our luxury real estate experts. We specialize in high-end properties in the most exclusive communities in Southern California.

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    Home size: 4,082 sq ft
    Lot size: 10,441 sqft
  2. 4 beds, 5 baths
    Home size: 4,097 sq ft
    Lot size: 30,343 sqft
  3. 3 beds, 4 baths
    Home size: 2,024 sq ft
    Lot size: 8,956 sqft
  4. 5 beds, 5 baths
    Home size: 4,989 sq ft
    Lot size: 6,549 sqft
  5. 3 beds, 3 baths
    Home size: 2,588 sq ft
    Lot size: 6,197 sqft

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(all data current as of 10/17/2017)

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