Houses for Sale in LA
According to a recent blog found on WSJ.com, the real estate market is showing signs that the recovery will continue into 2014 and beyond. According to the author, Kris Hudson, there are five reasons to be optimistic about the future of the US and Los Angeles real estate market.
The US Job Market is Improving
In 2013, according to the US Bureau of Labor and Statistics, jobs were added at a rate of 182,000 per month. The Wall Street Journal estimates that rate will increase to 200,000 per month in 2014.This is great news as the strength of the job market is a great indicator of the strength of the real estate market.
Loosening Credit Restrictions
Interest rates are rising and that means that banks are willing to take on a bit more risk for a bigger return. Buyers that may have had trouble getting financing just a few years ago will have an easier time now. More readily available credit means a stronger real estate market.
Interest Rates will Rise at an Even Pace
Interest rates must rise for banks to lower credit restrictions, but the pace of the rate increase is more important than the amount when it comes to a recovering real estate market. Last year, the 1-percent spike in interest rates caused the recovering market to stagnate for a period of time. Hopefully, lenders have learned from this misstep and will allow rates to increase at a measured pace.
Builders are Back
One thing that has slowed the overall market’s recovery is the lack of new inventory. The US real estate market depends on a consistent level of new construction. Unfortunately, the crash of 2007 drove many home builders out of business. Well, they are back. Housing starts have steadily increased over the past few years, and many economists project that over 1 million new homes will be constructed this year. That’s great news when you consider that just 780,600 were completed in 2012.
People are More Confident
Confidence plays a huge role in the decision to invest in a Beverly Hills house, Hollywood Hills home, or anywhere in the US. People that feel confident in the housing and job markets are willing to invest. Those that don’t tend to adopt a wait-and-see approach. Perception is everything, and right now, the perception is things are looking up.
So how does the Los Angeles real estate market measure up using these five standards? Pretty well. The Los Angeles job market continues to improve, lenders are relaxing their requirements, interest rates are going up at a measured pace, evidence of new construction is everywhere, and consumer confidence is up. Right now is a great time to enter the Los Angeles real estate market – both buyers and sellers.
To read the complete article, please visit WSJ.com.
Susan Andrews | Estates Director
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