High real estate prices and the increasing cost of borrowing money aren't deterring folks from trying to get into a home in Los Angeles this spring, the traditional house-shopping season. Even as the median price of a home in the market, which includes Orange County, has soared to nearly $600,000, would-be purchasers are scrambling to get a foot in the door.
"Inventory is tight," says Aaron Terrazas, a senior economist at real estate listings site Zillow. "There are a lot of buyers and not enough homes."
Greater L.A.'s $599,400 median home price represents a 6.4 percent increase over the past year, according to the site's latest "Real Estate Market Report." One reason: "There are 1.8 percent fewer homes to choose from than a year ago," Zillow spokeswoman Jordyn Lee said via email.
The L.A. Metro area still has some of the highest home prices in America, bested only by California cousins San Jose (with a $979,400 median) and San Francisco ($839,600); San Diego's $529,200 median ranked the city just below Greater L.A. for real estate prices.
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The rapid growth in home prices experienced here since 2012 appears to have infected the rest of the nation, with the nationwide increase in home values pegged at an L.A.-beating 6.9 percent. The SoCal market is cooling off just a little, which could provide a sliver of good news for house hunters.
"In the past six months, L.A. prices have been growing at a slightly slower rate" than those seen across the United States, Terrazas says.
However, Zillow is forecasting continued increases for Greater L.A. home prices, even if that growth isn't as rabid as it was five years ago. Terrazas says L.A. could reach a new record median home price in the next few months. "The biggest downside for buyers is rising mortgage rates," he says.
"Low inventory, strong demand and tough competition will be the defining characteristics of this year’s home-shopping season,” Zillow chief economist Svenja Gudell said in a statement. "Even though interest rates are rising, buyers are eager to start their home search."