Housing inventory in Los Angeles at decade lows

California and especially Southern California real estate numbers have been largely affected by low inventory, with Los Angeles seeing a whopping 60% fall from 2010 inventory numbers. The high demand (we are seeing multiple bids on properties in areas like Echo Park) and lower inventory is bringing up home prices – good for homeowners needing to sell, not as good for those looking for the lower-priced deals. Strangely enough, the modest increase in sales we have seen does not appear to match up with the significant drop in inventory (meaning a home sold means a home no longer for sale), however investor money and low down-payment buyers are the ones buying, according to DoctorHousingBubble.com.

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Home values rose 5.9% in last quarter of 2012

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Zillow’s most recent Home Value Index report indicated home values in the country rose 5.9% in 2012 from the previous year, and the best annual gain since 2006.

In the fourth quarter, home values rose 2.5% from the third quarter, up to a $157,400 average. Of the largest metros surveyed, 69% saw annual home value gains last year. Foreclosure activity also declined, dropping 12% from 16% at the end of 2011.

Even with the positive gains in home values last year, the new year is anticipated to see a more sustainable 3.3% appreciation rate, which Zillow sees as being more tempered.

Based on these numbers, Zillow projects a 3.3% rise in home values for 2013, a rise that will bring us up to the norm.

Home Builders say home buyer sentiment is improving

As we mentioned in a blog post last December, consumer sentiment had been on the rise when it comes to thinking positively about the course of housing prices in 2012. Additionally, the National Association of Home Builders/Wells Fargo announced Wednesday that home builder optimism has also continued to rise for the fifth month in a row. Builder sentiment index rose to 29 in February, up from 25 in January, and up 15 points since September. An overall improvement in consumer interest has contributed to this positive outlook (sales of previously owned homes increased in December), as well as a rise in home construction at the end of last year. Additionally, the average rate of a 30-year fixed mortgage is below four percent.

Despite this improved sentiment, the industry still needs some time. Sales of new homes aren’t improving, and builders are having to compete with foreclosures which have forced the price of previously owned homes down.

Read more about this on the San Francisco Chronicle.