Los Angeles Housing Market Prices, Trends & Forecasts 2022

It is common knowledge that the housing market is a great source of investment. For a majority of real estate investors, all the changes happening in the housing market are very important. What is more, the secret of success hugely depends on the ability to forecast main price alterations and the general behavior of the market. Specifically, the real estate market may sometimes be difficult to predict as it mainly depends on other market trends. Nevertheless, it is possible, and in this article, we will be looking through some of the real estate in California. To be more precise, we will narrow down our analytics to Los Angeles.

Thanks to the global attention to the Los Angeles housing market, there is a bunch of interest in taking part in this investment competition. There are a lot of sellers and buyers looking for the right time, as well as real estate investors who are ready to do some profitable business. Such a city with great apartments looks ready to benefit the investors as each year goes by.

How are houses for sale in Los Angeles steadily increasing their price and appeal? We will start with a short overview of the real estate market in the City of Angels. Precisely, what are the median home price, listing price, appreciation, and so on?

Median home price

To start with, the median home price is essential in the housing market. If to consider real estate prices, the median home price is the middle point. It is vital to keep in mind that it doesn’t equal the average home price. In one specific area, it is the mid point in a data set. To put it differently, it is the average of all the home prices on a particular site. 

Now let us work a bit with numbers. $928,000 – this is the median home price in LA at the moment. For the sake of comparison, this is much more than in California and the USA. Moreover, this median price has increased in the past year, and now it is 16,7 % higher than previously. Overall, the price has been rising dramatically in the past five years. Approximately the rise has been 114,2%.

Home listings

Moving on directly to numbers, the median listing price in LA for a home is about $941,000. Honestly speaking, in the past year, this number has not been stable in the past year and dropped by 5,9%. What is more, the new listings are not that promising. Their number of 1,006 has dramatically gone down in the last year. The decrease of around 22,4% has drastically influenced the housing market. 

Rent

Contrary to the median home price and home listings, the rent has not undergone significant negative changes. In the past year, it has grown by 11%, which is approximately $2,644 per month. As a result, the proportion of price-to-rent is 29,25.

Population

Given the topic of the article, you may wonder why we include this information. The thing is, the number of people living in LA has a drastic effect on interest rates and mortgage rates. Generally, the housing market hugely depends on any population changes in the region. The current population number is around 3,979,576, which is impressive considering the size of the area. For the sake of clarity, $62,142 is the median household income per month. Compared to the median home price, the difference is quite visible.

Housing market forecast in LA, 2022

Slower home values increase. The first fact that needs to be mentioned is that the increase in home values is expected to be a bit slower than before. In recent years, home value in Los Angeles has increased by 15,9%. Taking into account a tendency to add new listings to the market at higher interest rates, it is not a big surprise that home value is left without any space for growth. In all likelihood, the city’s home value will increase somewhere around 13,7%.

Higher renting costs. Considering the renting costs, already high for the majority of citizens, it is presumed they will continue rapidly increasing. In the last year, they have grown by 11%. Due to the fact that more and more people are believed to rent the apartments in the following years, the prices will be higher. Partially because of the impediments in construction of new flats which will force the people wanting to buy a new house to rent it.

People leaving the city. Due to the fact of rapid home value growth, more and more people will be forced to move in search of more affordable housing options. Partially, because of the high renting prices, drastically increasing interest rates, and low median household number. It is expected for such a trend to continue developing in the following years as people prefer to save their expenses and do not like the prices to increase that fast.

All things considered, the City of Angels is one of the most attractive places for real estate investors. LA’s housing market is expected to continue justifying the hopes of national trends and people preferring luxurious apartments. Thanks to its location, historical appeal, and already invested funds, it appears to be catching the attention of buyers, renters, and more and more investors from the whole globe. And it never stops attracting new potential customers. You may be lucky to get into Los Angeles’s ever-developing housing market.