Los Angeles real estate is bolstered by a strong local economy and an increasing desire for residents across the globe to own property here. The entertainment industry has remained prominent and Silicon Beach is growing at an impressive rate, keeping the high end and luxury real estate markets particularly strong.
But not all real estate markets are as hyper-local as Los Angeles. Most are much more dependant on overall economic trends. Now on the heels of an employment report marking 70+ months of job growth, it looks like home pricing has some good news of its own to celebrate.
Leading real estate analytics firm CoreLogic released its latest numbers on Tuesday. The CoreLogic Home Price Index (HPI™) and HPI Forecast™ for September 2016 were better than expected, showing home prices up both year over year and month over month.
Compared with September 2015, home prices across the country, even distressed sales, were up year over year by 6.3 percent in September 2016. Month over month, sales were up by 1.1 percent in September 2016 compared with August 2016.
After many if not most experts predicted flat pricing on minimal growth for not just 2016 but many years to go, it’s now looking like 2017 could see a similar 5 plus percent growth. The CoreLogic HPI Forecast predicts that home prices will increase by 5.2 percent on a year-over-year basis from September 2016 to September 2017.
Month-over-month basis home prices are expected to jump just 0.3 percent from September 2016 to October 2016, once the numbers are confirmed. But any growth at all from September to October is welcome since September generally marks the end of the high sales season.
And now for a technical sidenote: CoreLogic HPI Forecast projects home prices by using the CoreLogic HPI and other economic indicators. This data comes from state-level forecasts and weighting indices, which are linked to the number of owner-occupied households for each state.
“Home-equity wealth has doubled during the last five years to $13 trillion, largely because of the recovery in home prices,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Nationwide during the past year, the average gain in housing wealth was about $11,000 per homeowner, but with wide geographic variation.”
“Home-price growth creates wealth for owners with home equity,” said Anand Nallathambi, president and CEO of CoreLogic. “A 5 percent rise in home values over the next year would create another $1 trillion in home-equity wealth for homeowners.”
While prices are growing up nationally and locally, now is a good time to buy. The Fed has all but confirmed they’ll raise interest rates come December, a topic we’ll be monitoring closely and keep you updated on in future Luxury LA Homes posts.
If you’re interested in buying or selling a Luxury Home in Los Angeles, please contact us now at 323-829-8811 or email Susan Andrews at susan@luxurylahomes.com.
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