Well, that market has passed, or so it seems. Good for some, not so good for others. In today's paper, it's reported that home prices in the Los Angeles area are up 25.3%, however the number of sales fell 4.2%. That is a typical price increase for this year, however the number of homes sold is a strong decrease.
As a result, we are seeing homes sit on the market longer and prices being dropped. This is great for buyers, not so great for sellers hoping to get their dream number. However, in the long run, it is very good for the market.
The price increase year over year is high. However, now that we are there, we can take a look at each month to compare the price month over month to make sure we are on that same track. The number of sales could decrease some, but not much more for the market to sustain the price increases.
Then there is the interest rate. This alone could wreak havoc in the market. It's the wild card to watch. As the interest rate goes up, prices may fall as buyers are pushed to smaller or less expensive homes. For each 1% increase in the interest rate, buyers are kicked down 10% in price. Lots of money in our price ranges.
These numbers are for the Los Angeles metro area. The South Bay numbers, while different, will be similar. When those are out I will provide those as well.