Is now the Time to Buy a Home in Los Angeles? Understanding the Market and Challenges
Los Angeles is one of the most desirable cities globally, but is it a good time to buy a home? With rising housing prices, a shortage of available properties, and economic uncertainty, prospective homebuyers may wonder if now is the right time to purchase. While the city's real estate market presents unique challenges, such as low inventory and intense competition, it also offers diverse neighborhoods, job opportunities, and significant potential for real estate investment.
Los Angeles Real Estate Data
Jordan Levine, C.A.R.'s Vice President and Chief Economist, warns that high inflationary pressures will result in elevated mortgage rates, reducing purchasing power and depressing housing affordability in the upcoming year. A pullback in sales and a downward adjustment in home prices are expected in 2023 due to high borrowing costs. Additionally, low inventory and rising mortgage rates caused by inflation may impact sales activity. The recent implementation of Measure ULA, also known as the "mansion tax," is expected to bring a substantial transfer fee to the luxury real estate market of $5 million or over in Los Angeles. However, the long-term impact of this measure is still uncertain. Despite properties selling quickly in Los Angeles County, sales of existing single-family homes have decreased by 38.2% YoY. If you want to purchase a home in LA, be prepared to spend a little more than the asking price.