I’ve been looking over the numbers for home sales on the Westside this first quarter of 2017. Though all the numbers haven’t been crunched, I do see a trend of rising home prices, which is fabulous for those wanting to sell a home.
I’m not the only one noticing this trend. In fact, the LA Times reported that Southern California home prices showed the largest increase in more than a year. The median price for resale homes for all counties in Southern California increased in February, with Los Angeles County increasing by a whopping 7.9%.
Rising Home Prices: Why Is it Happening?
Although many factors go into the rise and fall of home prices, this rise seems to be fueled by the shortage of homes for sale. Open houses have been crowded, and bidding wars are becoming far more commonplace. It’s not unusual for homeowners to receive several offers. It certainly puts my negotiating skills to the test.
Another big factor is that the economy is doing better. Unemployment in the Los Angeles area has dropped from 5.6% to 4.8% due to a substantial addition of 33,400 jobs mostly in the education and hospitality markets.
Will Rising Home Prices Continue?
Let’s be honest. No one really knows what the future holds. However, having been in real estate for years, I do have a few ideas based on the past. My feeling is that prices on the Westside will continue to rise for the rest of 2017, but maybe not quite as quickly as during this first quarter.
Why the slowdown?
- Mortgage interest rates are rising. The first of March saw interest rates at 4.3%, up from 3.54% in November. The Federal Reserve is also poised to raise rates again. As interest rates rise, fewer buyers will be in the market. With fewer buyers, having fewer sellers will not create such a seller’s market.
- Home prices are increasing faster than wage increases. Whenever home prices go up faster than the wages of those buying, the increase of home values slows a bit.
What Do Rising Home Prices Mean For You?
If you are a seller on the Westside, now is a great time to sell. Properties are hot, and buyers are anxious to beat rising rates.
If you are a buyer, now is a great time to buy. Although you’ll have to be fast and flexible when it comes to making an offer, interest rates are still extremely low. Buying now, before another rate hike could save you thousands.
I’d love to talk with you about the Westside housing market and offer my advice for your home buying and selling needs. Feel free to give me a call 310-867-0173.