New Year, New Market
After a long and earlier than usual election-fueled seasonal slowdown, the market has bounced back in December and especially in January. Even heavy rain won’t stop these buyers who come from far and wide looking for that perfect $1M starter home in Silicon Beach. Despite the change in presidential philosophy and higher interest rates, the level of activity suggests there is optimism in the economy that Obama left us with – 4.7% unemployment, the Dow near 20,000, and a booming job market in Los Angeles. Continued low inventory and high rental prices contribute to buyers paying top dollar to purchase a home.
The biggest challenge moving forward is going to be affordability, especially for first time buyers. With prices still clearly on the rise, many buyers are priced out of their first and second choice neighborhoods. For example, the neighborhood which was the pride of the 1890’s, but has not been trendy since, West Adams, was noted as the 9th hottest real estate market in the country based on price appreciation. Inglewood, which had been better known from rap lyrics than from real estate values, is up to some good primarily due to the upcoming football and entertainment complex and proximity to the Westside. Average prices for single family homes in these areas now exceed $600,000, a key measure for affordability, so what area will be next? In order to get a value (or get in at all), buyers are going to need to consider areas that they had once deemed forgettable or undesirable. This is a good thing as it will help revitalize neighborhoods that had once been economically depressed.