Los Angeles - not down and out yet
According to housing market watcher Annette Haddad at the LA Times, Los Angeles has yet to pop in an April 13 story. In March, the median home price in LA County hit $506,000, up 15% YOY and 3% above February. To buy that house, a household needs an annual income of $120,000 to get conventional financing (with a 20% down payment, equalling $101,200). The county's current median household income is $47,000.
Economists claim that since the housing busts of earlier times, the region is no longer dependent on any single industry (e.g., aerospace), mortgage rates are lower, and people aren't being panicked into selling at lower prices. But others say that sales volume is slowing, more homes are coming on the market, and the rate of price appreciation has slowed. One UCLA economist says that the deceleration in prices, a smaller volume of sales, and growing supply are the typical signs of a slowdown's first stage, and that it can take the better part of a year to really see lower prices.
In places like Lancaster, the housing market is still hot, in part because of the region's general affordability problems.
posted by bearmaster at 7:47 AM
3 Comments:
it's inevitable that prices will come back in line w/ incomes and rents. the market can't sustain high prices while keeping out the majority of buyers due to affordability issues.
but, as the bubble naysayers can rightly claim, it's not a bubble until it pops, and at least here in socal it hasn't yet. but the prospects for continued hight prices don't look good...
Check the recent posts here for the March sales in the south bay area. Q1 was showing weakness, but not a cave-in weakness. And sales are looking pretty strong for April. We'll see if this spring momentum holds.
The downturn is just getting started...so what if the median price went up a few points. The perfect storm is building that will blow over this house of cards.
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