Los Angles Housing Market Trends: How Things will End in 2021
November 9th, 2021 by Administrator
As we head towards the last quarter of 2021, the L.A. real estate market is still sizzling, with properties reaching high prices. Although prices on the state and national level began to cool off in July, real estate brokers and other experts believe median home prices to be up by 21% by the year’s end.
A rapid increase in housing demand from millennial buyers with higher-paying jobs and wealthy investors looking to take advantage of low-interest rates are primary reasons why L.A.’s market isn’t fizzling out.
The Current Los Angeles Market
Los Angeles is facing a housing shortage, just like any other major city in the United States. The LA County accessor reported a 3.7% increase in the annual property tax assessment roll with a new assessed value of $1.67 trillion. Since the Great Recession, this is the 11th straight year of tax assessment growth across L.A. County. In simple words, the L.A. market is still hot and healthy.
Here are a few factors to consider when looking at where you may stand in the current real estate market.
- It is Still a Seller’s Market
Demand for housing continues to outperform the number of properties coming on the market. Although the housing market has calmed down a bit, it is still a sellers’ market.
- Buyers can Still Strike Good Deals
Currently, interest rates are still at historic lows. In most cases, a mortgage is proving to be a cheaper option than the cost of the rent. So, even though prices are rising, homeownership is feasible for many.
Moreover, many people are aware that it is still a sellers’ market. That’s why more homeowners are putting their homes on the market. It has helped create some additional inventory and somewhat softened the demand.
Due to outrageous appreciation in the market last year, some buyers put a hold on their investments. Some homebuyers decided to wait until things calmed down. That resulted in a steady buyer pool.
- Impact of COVID-19 Pandemic and Recession
Many people are comparing last year’s recession with the one in 2008. Keep in mind that the cause of both the recessions is different, and they didn’t even last the same amount of time.
The Great Recession (2008) affected the housing market for almost two years. On the other hand, the Global Pandemic in 2020 affected the market for two months. Moreover, many experts believe the rise of a more contagious virus variant is likely to accelerate the hybrid and work-from-home trend. That will drive buyers with the means to upgrade to bigger properties.
- Bidding Wars may Slow Down in Coming Months
Some buyers overpaid for homes during the unprecedented time last year. Experts believe that the bidding wars that helped escalate the property prices over the past year will start to slow down. With more homes listed for sale, inventory is gradually increasing, making it more competitive for sellers. If you want to take advantage of this changing Los Angeles market, contact a reputable and experienced real estate broker. The experts can help you navigate your next move, whether it’s now or in the coming year.