Well, my friends in Northeast LA and nearby environs, Northeast Los Angeles real estate is truly in our own special spaceship of home-buying and home-selling activity. The California Association of Realtors Chief Economist, Leslie Appleton Young, gave a talk on the state of California's housing in the recent past. According to her charts and statistics, California has not yet reached the peak prices of 2007.
In contrast. we are experiencing the highest sales prices ever in Los Angeles--from the beaches to the mountains, across almost all communities. Is it any wonder that one of the most common questions we Realtors are asked now is "So when is this bubble going to burst?"
Here is the latest update for Northeast LA real estate market.
First, this is not a bubble like 2008. The lending environment is much more conservative thanks to laws passed to protect the consumer from predatory lenders--and from themselves. Today you cannot obtain a regular mortgage loan based on what you say your income is. Today, you have to prove where every dime of your down payment came from and have every penny of income verified. By and large, home buyers today have much more equity in their homes than they did a few years ago and consequently are much less likely to walk away from a home that they actually have ownership in.
Second, Northeast Los Angeles is kind of under the radar as far as state and national statistics go. Here is what the National sales looked like in August, 2016: The median existing-home price for all housing types in August was $240,200, up 5.1 percent from August 2015 ($228,500). August's price increase marks the 54th consecutive month of year-over-year gains.
And for the state of California:
Here is the data for our 3 zipcodes, 90041, 90042, 90065—Our median price ($737,000) is 25% higher than it was in the peak period of Jun-Aug 2007! As I say, back in the dark days of 2008-2011, no buyer or self-described market expert felt that we would ever (EVER!) see the 2007 peak prices again.
Remember, many fundamentals for buyers are much better now than they were in 2007—interest rates are now in the 3.5-4% range for fixed rates compared to 6.5-7% then! Which is why there were so many adjustable rate mortgages prior to the bubble burst—and that was how so many people found themselves overleveraged and with no financial cushion.
We definitely have affordability issues here, no question. But this is nothing new. Southern California has always had special appeal because of its weather, beauty, and healthy economic status compared to many other parts of the country. New housing starts have not recovered, partly because we don’t like development in our own backyard. So low inventory continues, competition for the best or best-priced homes continues, and hopes for a market “correction” continues. Some buyers prefer to dream, but the ones who can manage to purchase a home now generally are glad they did.