In his latest column for MarketWatch, The Agency’s Edward Fitz weighs in on how the L.A. housing market may be losing momentum in residential sales this year. Although 2016 ended on a high note with two residential sales surpassing the $100 million mark, and several other multi-million dollar deals being closed, the number of overall sales hit a decline toward the end of the year. A large factor to consider is that the average home is unaffordable for most Los Angeles County residents, which makes homeownership seem like an unattainable goal for many.
According to the California Association of Realtors Affordability Index Third Quarter Report for 2016, the median home price in L.A. County was $536,720, an amount that only 26% of residents in the county can afford. This makes Los Angeles, according to Ed, the city with the lowest homeownership rate in the country.
Edward believes that although prices may level off eventually, other factors, such as increased interest rates, won’t make homeownership any more affordable. Even with a decline in home prices, Edward looks at history as proof that rates are sure to spike again eventually. So what’s a potential homeowner to do? Edward suggests buyers look to the San Fernando Valley, Eagle Rock, and other up-and-coming neighborhoods to find hidden gems on the market.