By Bess Hochman
The forecast by the Chief Economist for the National Association of Realtors is for a rebound for existing home sales nationally in 2015 and 2016. The expectation is for a 4 percent rise this year as well as next year in the median sales price for existing homes.
Many experts predicted last year that a substantial number of “regular buyers,” as opposed to investors, would jump back into the market. However, while the economy improved in 2014, prices have remained too high for most buyers.
Economists are in agreement that housing affordability is really to blame for the purchasing slump. In Southern California, home price growth has risen way above income growth over the last couple of years. Nationally home price appreciation has outpaced wage growth by a ratio of 13 to 1.
Los Angeles is considered a hot market, and does not typically perform according to national statistics. In the first six months of the year, home prices in Los Angeles rose for all property tiers.
The statewide average in California for low-tier property prices was 9 percent higher than a year earlier. Average mid-tier prices were 7 percent higher and high-tier prices were 6 percent higher.
Normal price value growth on an annual basis is considered to be between 3 percent and 5 percent. According to data from Zillow, the median sales price in Los Angeles is $539,600, up 5.2 percent over the last 12-month period as of June 30, 2015.
The number of homes for sale remains well below the historic norms for Los Angeles. This is causing bidding wars over what little inventory there is on the market and prices to rise.
The luxury Westside of Los Angeles distinguishes itself by going far beyond beating normal price appreciation. It is breaking all price records!
According to the Case-Schiller index, L.A. home prices are up 126 percent since 2000. That puts L.A. at the top of the list of all U.S. cities for the largest increase in home price appreciation over the last 15-year period.
While the ultra-high end market commands the attention of the mega-wealthy, analysts with CoreLogic DataQuick, a respected source for real estate data, confront the realities of the average buyer. These analysts advise that in order for the overall Southern California housing market to pick up speed, more people will have to be earning higher wages.
Most important in ensuring people will be able to enter the housing market will be the creation of a stronger jobs market.
The National Association of Realtors expects real estate sales to be bolstered by loosening lending standards and by economic growth. As job numbers continue to grow, the outlook is for annual sales volume to increase slightly for the remainder of 2015 through 2016.
For a free courtesy consultation, or information regarding mortgage brokers, contact Bess Hochman, a top Westside Real Estate Broker for over 20 years. Bess is also distinguished by holding a law degree. This article expresses the opinion of the author. You are advised to consult attorneys and others experts specializing in the issues referenced in this article.
Contact Bess by phone at 310.291.4111 or email Bess.CenturyCityNews@yahoo.com. “Bess is a master negotiator!” says Michael Donaldson, attorney and author of “Negotiating For Dummies.”
