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Home prices in the major metros of the U.S. are still on the rise, with average home prices now looking like its spring 2004 level. In the past year, Los Angeles home prices have gone up 19.2% according to the S&P/Case-Shiller index, while the CAR cites a 31.7% year-over-year price increase, and Trulia a 37.5% increase (wow!).
The major factors contributing to the rise in home prices, especially when it comes to real estate in Los Angeles areas like Echo Park and Silver Lake, are a lack of inventory. Also, interest rates continue to stay at historic lows, even though mortgage rates have recently gone up.
The rise in home prices in Los Angeles is slowing down – from April to May this year, the data shows a price increase of only 2.6%, as opposed to a 3.4% gain from March to April. Mortgage rates are on the rise, and we do expect to see a trickling of homes coming on the market as home values and prices appreciate. Because demand is high, these factors make now a perfect time to consider selling in the Northeast Los Angeles area.
Whether you’re looking to buy or sell, now is a perfect time. Give me a call today!
Year-over-year, the 10-city Home Prices Index rose 7.3%, while the 20-city index rose 8.1% (economists had forecast an 8.2% rise). Phoenix led the nation with home prices rising 23.3% alongside its sharp drop in the unemployment rate.
Los Angeles home prices rose 12.1% in the last year, and 1% month-over-month.
All of these numbers are part of a larger trend that saw home price gains in all 20 metros for the first time in over two years.
According to Freddie Mac's newly released U.S. Economic and Housing Market Outlook, home prices for the country rose 4.8% in the second quarter of this year. This and other numbers indicate a strengthening market, especially as 34 states (the largest number in years) posted gains in home prices from June 2011 to June 2012.
There are many who are convinced that there’s a huge number of shadow inventory that will threaten these HPI (Home Price Index) gains. CoreLogic says shadow inventory has fallen by 28% since January 2012, but others say there are still millions of underwater homes and foreclosures that were backlogged when the foreclosure investigations started.
But Freddie Mac isn’t concerned: “While the shadow inventory persists, there is an important difference in today’s market compared with those of recent years, and that’s the substantially reduced amount of excess vacant housing,” said Frank Nothaft, VP and chief economist for Freddie Mac.
Additionally, foreclosure filings have decreased 10% over the past year, and just in July had declined 3% from June.