L.A. County Home Prices Climb 26.6%
Los Angeles County’s housing prices blazed upward again last month, setting another record high.
The median price of new and existing homes sold in January hit $352,000. That was 26.6% more than the median of $278,000 a year earlier, DataQuick Information Systems of La Jolla reported Wednesday.
Year-over-year increases have exceeded 20% every month since July, and more of the same is in store for the months ahead, predicted Michael Carney, a professor of finance and real estate at Cal Poly Pomona.
“We will see no slowing of that rate of increase until interest rates substantially increase,” Carney said. And that’s not expected to happen right away. In fact, Federal Reserve Chairman Alan Greenspan said Wednesday that the Fed was in no hurry to raise interest rates.
By this time next year, however, the year-over-year rate of increase in median home prices in the county should be about 10% as interest rates rise, Carney said.
Last month, 8,030 houses and condominiums were sold in Los Angeles County. That was down 2.5% from 8,240 in the same month a year ago.
The slowdown wasn’t for a lack of demand. There just weren’t enough houses to sell, said real estate agent Eric Toro of Uptown Properties.
“We don’t have a lot available,” said Toro, who specializes in the Highland Park district of Los Angeles. A lot of people, he said, “are choosing to stay put and fix their houses.”
Others are looking at older neighborhoods, which gradually fell out of favor after World War II but are enjoying comebacks as many buyers decide they want to live closer to work, Toro said. The result has been price increases rolling through central L.A.
DataQuick analyst John Karevoll said market conditions could be different at the end of the year depending on whether broader economic issues such as the federal deficit are addressed.
“Interest rates will go up,” Karevoll said. “The question is whether that increase will be accompanied by an increase in household finances or an increase in inflation.”
