Why Aren’t Home Prices Crashing? Here’s Why LA and Beverly Hills, CA Remain Resilient
Why Aren’t Home Prices Crashing? Here’s Why LA and Beverly Hills, CA Remain Resilient | Christophe Choo at Coldwell Banker Global Luxury is Your Local Real Estate Expert
While the U.S. housing market experienced a lot of changes over the past year, Los Angeles and Beverly Hills, CA have remained resilient despite the pandemic. The question on everyone's mind is why aren’t home prices crashing, and what is the secret behind these two cities’ success?
According to Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), home prices will remain steady across most of the country, with only minor changes in the national median home price. But what about LA and Beverly Hills, where prices are notoriously high? The lack of inventory is limiting how low prices will go in these cities, even in the face of the pandemic.
As shown in the graph below, we’ve been at or near record-low inventory levels for a few years now, and this lack of available homes on the market is putting upward pressure on prices. This ongoing shortage of inventory is why many buyers still have little choice but to bid up prices in LA and Beverly Hills.
Additionally, many homeowners in these cities have plenty of equity right now, which acts as a cushion and lowers the chances of distressed sales like foreclosures and short sales. With low mortgage rates, this equity cushion isn't going anywhere soon, making it easier for homeowners to hold onto their properties and keeping supply low.
While some experts believe that low inventory will continue to vex the housing market throughout 2023, others are optimistic that more homes will come to the market as the pandemic wanes. But until then, it’s important to work with a trusted real estate agent who understands your local area and can navigate the current market volatility.
In conclusion, if you’re thinking about buying or selling a home in Los Angeles or Beverly Hills, the current market conditions may seem daunting, but don’t let that deter you. With the right guidance and expertise, you can still make a smart investment decision and achieve your real estate goals.