While housing supply can't seem to keep up with demand, local real estate professionals remain optimistic.
"This is the city near the beach with lots of sunshine and culture! Los Angeles is known for it's ocean and beaches, but is only a day's drive from the mountains. It currently boasts about 10 million residents. Los Angeles is the place to be if you are an artist, a business person, or one who simply enjoys the best a world-class city has to offer," says Realtor Kathleen Chiras.
She adds, "The market in the City of Angels is calming down after the wild summer rush. Of course, a calm day in LA might terrify even a veteran realtor from another part of the country! Sales are still brisk, but the market is beginning to smile on buyers, not just sellers. Indicative of this trend are overpriced properties stagnating on the lists. Sellers have enough selection to demand reasonable prices. Values are stabilizing in Los Angeles -- we certainly aren't seeing the sharp, 25 percent climb of the past four years. If you are looking to buy in LA, begin with the representation of a buyer only agent. Unlike a traditional agent, a buyer only agent is free to serve your needs, without worrying about increasing their commission by selling you their own listing. A buyer only agent is motivated to get the best possible deal for a home purchaser."
Realtor Bernie Leibovitch notes, "Median home prices topped $600,000 this year! Prices have doubled over the past 5 years. Home equity is at an all time high and the California Association of Realtors predicts prices will continue to rise over the next year, though at a more modest rate. This is great news for the housing "haves," but bad news for the "have nots." Higher prices mean fewer people can afford to buy a home -- affordability in California is down to 17 percent."
He continues, "Our increasing population requires more housing units, but we're not building enough. As a result, demand outpaces supply and prices go up. Hurricanes Katrina and Rita caused untold damage to lives and property in New Orleans and the Gulf States. The massive rebuilding effort will undoubtedly increase pressure on construction costs here in California. Construction costs were already high before the hurricanes, due in part to significant increases over the past few years in the cost of (plywood, cement, etc). Higher building costs puts pressure on housing prices. We don't have enough buildable land to build the amount of housing units needed to house our increasing population. Land prices have risen significantly, in part, due to it's limited supply. This too causes upward pressure on home prices. Long term interest rates for home purchases remain low despite recent short term rate increases by the Federal Reserve. Purchasing a home today allows one the opportunity to lock in a low, long-term interest rate -- a key component in buying a home. No one knows how long this window of opportunity will last."
"The City of Angels has long held its place as one of the most famous cities in the world," notes Realtor Rick Lombardo. "A mecca for many types of business and a melting pot of diverse cultures, L.A. has also become one of the most desired cities in which to live. With the ocean and beaches, mountains and natural parks, along with city life energy that is unsurpassable, L.A. has something for everyone."
He notes, "With low interest rates and a low number of homes on the market Los Angeles real estate has continued to stay hot. There are still a large number of buyers who are looking to purchase their first home as well as move up buyers. If you are looking for a home that needs some cosmetic work you may be able to find something under $700,000, but typically anything under $1,000,000 seems to be selling within 21 days. Homes priced over $3,000,000 tend to be sitting on the market longer because some sellers having unrealistic expectations of their property and there are not as many buyers that are able to purchase the high end homes."