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Los Angeles, CA: Real Estate Market & Trends 2016

Published on Tuesday - July 26, 2016

Los Angeles is the second-largest city in the United States and boasts one of the more prosperous housing markets in California. Home prices in L.A. continue to increase in 2016, as the median home price, which has increased significantly since the recession, is now at $458,900 — almost double the national average of $215,767. Thanks to a growing economy and unemployment rates below the national average, the Los Angeles real estate market is primed for exponential growth in 2016.

The median home price in the Los Angeles real estate market continues to see tremendous growth. This past year saw home prices increase 6.3 percent compared to the national average of 6.1 percent, while overall the median home price has increased 32.8 percent in the last three years. The Los Angeles real estate market has also benefited from gains in equity, which are now almost double the national average. Thanks to price appreciation and principal payments, gains in equity have increased to $34,446 in the past year, compared to the national average of $15,781. In the last three years, equity gains in the Los Angeles housing market have topped $132,101, which is nearly three times the national average of $49,356.

Los Angeles, CA Real Estate Market Statistics

Los Angeles real estate is continuing on the right path on its road to recovery. The latest real estate market statistics reflect positive growth for the city ,which is home to more than 13 million people. The following highlights year-to-year equity gained through 2016 Q1:

  • Homes purchased in the Los Angeles housing market one year ago have appreciated, on average, by $34,446. The national average was $15,781 over the same period.
  • Homes purchased in the Los Angeles real estate market three years ago have appreciated, on average, by $132,101. The national average was $49,356 over the same period.
  • Homes purchased in the Los Angeles housing market five years ago have appreciated, on average, by $188,058. The national average was $68,727 over the same period.
  • Homes purchased in the Los Angeles real estate market seven years ago have appreciated, on average, by $188,576. The national average was $59,758 over the same period.
  • Homes purchased in the Los Angeles housing market nine years ago have appreciated, on average, by $50,711. The national average increased $16,435 over the same period.

Los Angeles, CA: Real Estate Market Summary:

Los Angeles real estate market summary

  • Current Median Home Price: $458,000
  • 1-Year Appreciation Rate: 6.3%
  • Unemployment Rate: 4.8%
  • 1-Year Job Growth Rate: 2.6%
  • Population: 13,296,946
  • Median Household Income: $58,860

Los Angeles, CA: Real Estate Market (2016) — Q1 Updates

Los Angeles real estate market

The first quarter of 2016 has been solid for the Los Angeles real estate market. Record-low mortgage rates continue to make the housing market in L.A. appealing for homebuyers, as mortgage rates for a 30-year fixed-rate loan fell from 3.9 percent in the fourth quarter of 2015 to 3.7 percent in Q1 2016. Rates are expected to remain low for the duration of the year.

In terms of economy, Los Angeles is continuing to improve like other cities around the country, as unemployment and job growth continues to fare better than the national average. The current unemployment rate is 4.8 percent compared to the national average of 5.0 percent, while job growth in the last 12 months increased 2.6 percent compared to the national average of 2.0 percent.

Los Angeles has historically been one of the most expensive markets in the nation. Although the economic environment of L.A. continues to show positive signs entering 2016, home affordability remains above the national average. The monthly mortgage payment to income was 18.5 percent in the first quarter of 2016, four percent higher than the national average. Also, the median home price to income in Q1 was 3.3 compared to the national average of 2.6. The good news is home affordability, which was 19.6 percent in 2015, is subtly improving in 2016 and remains significantly lower than its historical average of 23.9 percent.

Another component fueling the Los Angeles real estate market is new construction. In the past 12 months, the number of single-family housing permits increased 17.1 percent compared to the national average of 11.3 percent. The current level of construction is approximately 9.2 percent above the long-term average.

Moving forward, the Los Angeles real estate market is expected to continue its climb into the second quarter of 2016. Realtor.org expects higher price growth in California than in the U.S. in the next 12 months, with L.A. rising 4.2 percent compared to the national average of 3.8 percent. The Los Angeles, CA real estate market remains prosperous for investors, particularly house flipping and rental properties.

*The information contained herein was pulled from third party sites. Although this information was found from sources believed to be reliable, FortuneBuilders Inc. makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. Any reliance on this information is at your own risk. All information presented should be independently verified. FortuneBuilders Inc. assumes no liability for any damages whatsoever, including any direct, indirect, punitive, exemplary, incidental, special, or consequential damages arising out of or in any way connected with your use of the information presented.

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