9 Trends We Saw in Los Angeles Real Estate in 2019
The Los Angeles area has historically been one of the best long-term real estate investments in the United States over the last ten years. This trend continued through 2019, aided by a growing economy, a high demand for homes in the area, and strong ties to the highly-profitable entertainment industry.
Nine Trends We Saw in Los Angeles Real Estate in 2019
1. The Area Set a Median Home Value Record
According to FortuneBuilders, the Los Angeles real estate market set a record for median home values in 2019. Due to increasing demand and lack of available inventory, the median home value in the Los Angeles area rose 0.6% to reach $719,000. That value is expected to increase again by the end of 2020. The median home value in the United States is $231,000, a difference of 67.9%.
The Los Angeles housing market is one of the top-performing real estate markets in the nation when compared to other local markets in the country. In addition, it boasts one of the lowest mortgage default rates in the United States among property buyers and real estate investors. The area also averaged a foreclosure rate of 3.6% compared to a national average of 4.4%.
2. Homes Have Appreciated
The median home price in Los Angeles today is the result of seven straight years of appreciation. Since 2012, the median home value in the Los Angeles area increased by an amazing 86%. Median home values in the United States saw an increase of only 53% over the same time period.
3. Interest Rates Remained Low
Due in part to low interest rates on mortgages, home sales were up 7.4% in the area in 2019. Interest rates have continued to fuel demand for homes in the Los Angeles area. According to Freddie Mac, rates for 30-year, fixed-rate mortgages averaged 3.72% in December 2019, down from 4.64% in December 2018. Interest rates for adjustable mortgages averaged 3.39%, down from 4.02% a year earlier.
After several years of low rates, there was a slight increase in mortgage interest rates at the start of the current year, which some experts believe may continue. Rising interest rates, however, generally mean that Americans are continually willing to borrow money for new homes. If this trend continues, it could mean that buyers will give lower offers for homes to counteract the higher interest rates or they may decide to postpone their purchases and await more favorable rates in the future.
4. The Area Attracted People From Around the World
5. It Was Largely a Seller’s Market
This means that finding a home that met their needs took many buyers longer than they expected. It also meant that they had to expand their search beyond their initial ideal neighborhoods in order to find more housing options. For these reasons, finding a real estate agent with extensive knowledge of these neighborhoods is essential.
6. New Home Construction Was Down
According to data from the U.S. Census Bureau, single-family residential home construction was down 5% in 2019. The decline in new housing development was likely due to a rise in construction costs over the same period.
7. Millenials Topped the Buyer’s Market
A continual trend over the past few years has millennials dominating the top demographic in the homebuyers’ market. They accounted for nearly half of all new home buyers in 2019. This trend is set to continue over the next few years for a number of reasons.
Millennials are now beginning to find more stable jobs, with an average higher income. In addition, American millennials are not looking to purchase starter homes but prefer larger homes in middle- and upper-middle-class neighborhoods. In 2020, millennials are again expected to make up the largest percentage age of new home buyers.
8. New Technology Was a Popular Feature
The growth of technology exerts a tremendous impact on many industries, and real estate is one of them. In 2019, the real estate and housing markets continued to adopt new technologies, which included online selling platforms and apps and smart home technologies.
The number of high-tech companies that service the real estate and new home construction sectors—from companies that provide virtual tours of homes on the market to construction businesses that install smart technologies in new homes— grew in 2019, and that trend is expected to continue
9. Buyers Looked Beyond the Downtown Area
These more affordable areas are still in close proximity to Los Angeles and offer access to all of the city’s amenities—such as transportation, entertainment, dining, and shopping—without the higher housing prices. Many homebuyers found this area to be the perfect solution to their housing needs.
Perhaps the biggest factor in understanding trends in the California real estate market is having a realtor with extensive knowledge of the area. A real estate professional with extensive experience in the local housing market can recognize home buying trends and translate those into insights that will help clients get the most out of their buying or selling experience.
Get the Best on Your Side
To help you find the perfect home for you and your family to put down roots, contact Teresa Mack and let her put her expertise in View Park real estate to work for you.