Sunday, July 13, 2014 / by Marilyn Perna
A recent Fannie Mae survey shows that more than 90% of the nation’s consumers believe that home prices are likely to rise. Nationwide, home values rose as much as 10 to 20% last year. Many consumers expect at least another 3 percent rise in the coming months. The increase in Los Angeles housing prices was above the national average increase of 14 percent, said Craig Lazzara, senior director of index investment strategy at S&P Dow Jones Indices. “What we’ve seen is the recovery is solid and has strengthened over that entire 12-month period,” Lazzara said. As a result potential buyers should start looking sooner rather than later.
California median home price to increase
Economists anticipate that the California median home price will increase 6 percent to $432,800 in 2014. “We’ve seen a marked improvement in housing market conditions in a year with the distressed market shrinking . . .” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “As the market continues to improve, more previously underwater homeowners will look toward selling, making housing inventory less scarce in 2014. As a result of these factors, we’ll see home price increases moderate from the double-digit increases we saw for much of this year to mid-single digits in most of the state.”
Positive Trends for 2014
The Los Angeles housing market, in particular, is benefiting from an improvement in the labor market and fewer distressed homes for sale, said Stuart Gabriel, director of the Ziman Center for Real Estate at UCLA. Another factor driving home prices up is the lack of available inventory. For sellers, this means placing your home on the market now has to potential to get it sold faster, and at a moderate price increase.
Factors to impact the Los Angeles Housing Recovery
Some of the wild cards for 2014 include federal, fiscal, monetary and housing policies as well as the housing supply and the Federal Reserve’s actions, said Leslie Appleton-Young in a statement.Many analysts expect fixed mortgage rates to go up somewhat in 2014, but to top out at around 5%. As interest rates go up, however, prices will correspondingly come down to adjust to buyers’ debt-to-income ratio. To set the appropriate price on your home, work closely with your professional real estate agent. Don't waste your time by listing too high only to have to wait and lower the price. "Buyers are smart these days -- they know where the market is, and now that rates are higher, they aren't going to bite on a list price above recent comparables," says Sara Fischer, an agent with Redfin based in San Diego.
Pricing Considerations for 2014
Your neighborhood comparables and the “mood” of the Los Angeles housing market in your area, along with the input from your agent will help you determine the best price for your situation. Remember, the mood of the market includes more than the national reports tell you. Your market is made up of a combination of the local jobs report, home inventory, interest rates, local school popularity, which neighborhoods or home styles are trending, and the community’s perceived desirability of your address. As your professional real estate agent, I stay abreast of this information and work with your to set the right price for your home. For more information about housing trends and activity for your specific neighborhood or to find Los Angeles area homes for sale, please contact me at (323) 251-6011.