Homes in LA have reached record highs again, tying the previous median sale price of $615,000 in May. Although prices are not climbing quite as fast as they were a year ago, LA County continues to see growth at a rate (1.7%) faster than that of the rest of Southern California (0.2%). But even with record-high Los Angeles home prices, homes on the market continue to sell as mortgage rates fall and unemployment remains steady.
Current Westside Prices
On the Westside, prices are even better. Based on the market insights provided by Redfin, we see that several areas are climbing much faster than Los Angeles home prices as a whole:
- Brentwood – $2.2M, up 6% over last year
- Westwood – $2.29M, up 81.1% over last year
- Venice – $1.71M, up 3.3% over last year
- West LA – $1.9M, up 2.6% over last year
- Beverly Hills – $2.11 M, up 28% over last year
- Culver City – $1.27M, up 14.5% over last year
Falling Mortgage Rates
As mortgage rates continue to go down, the number of homes sold continues to rise. As of July 1, mortgage rates were 3.875% for a 30-year fixed mortgage, much lower than this time one year ago, and seeing the lowest rates since the fall of 2017.
The Realtor.com forecast for 2019 originally forecasted mortgage rates at 5.5%. The 1.625% difference is substantial. In terms of house payments, a home at the current LA County median price with a 30-year fixed mortgage at 5.5% would have $3492 monthly payments. On the other hand, at the current 3.875%, monthly payments fall to $2892. The difference allows more people to enter the market as buyers.
Unemployment is Steady
The May unemployment report has also been good for the housing market and Los Angeles home prices. The May rate was 3.6%, which was the same as the month before, and down considerably since its peak at 10% in 2009. Forecasts continue to suggest that these rates will remain historically low throughout the remainder of 2019 and into 2020.
Add to this continued wage growth. The average hourly pay has risen for three consecutive months. When consumers can find employment and wages are increasing, home sales naturally rise.
To learn more about the housing market on the Westside and Los Angeles home prices, give me a call. I’d love to discuss the current trends with you and help you buy or sell a home.