If you’re thinking of buying or selling a home in the LA area, you’ve probably been thinking about the current state of the real estate market—wondering if the timing is right or if it’s better to wait, wondering if buying, selling, or investing makes financial sense… there’s a lot of thought that goes into real estate.
So, here’s what you need to know about today’s real estate market.
Interest Rates are Up… But Not Really
In 2016, interest rates hit a near-historic low, which basically kick-started the market, drawing leery buyers and investors out from hiding and into the open. Since then, however, rates have been slowly climbing over the years, with more rises predicted for the future.
However: Rates are still very low, compared to what they’ve been in the past. And actually, over the course of 2019, they’ve actually fallen a bit, from 4.51% to just 4.06% at the end of March.
Income is Definitely on the Rise
Even more important than interest rates are average earnings. And those are definitely climbing steadily. In fact, average hourly earnings have increased 1.9% compared to last year. Good news for buyers, definitely—more money to spend on housing—but also for sellers—more buyers willing to spend more.
Home Prices are Stabilizing
Throughout the course of 2018, home prices rose… and rose and rose! They reached a max in July, which was pretty spectacular for a lot of sellers, but maybe not so much for buyers. Since then, prices have evened off and even fallen a bit. Of course, this is good news for buyers, as homes are a bit more affordable, but it’s also good for sellers; favorable buying conditions usually mean more buyers!
One more thing to note: falling prices don’t mean a falling market. In fact, this leveling off of the market is actually quite healthy, as it will calm excessive growth that has driven prices too high and made home buying unaffordable for some.
The Bottom Line
The real estate market is robust, healthy, and stable. Conditions are favorable for both buyers and sellers, with low interest rates, competitive prices, and plenty of interest (for sellers) and options (for buyers).