Recently, a Forbes article explored whether and when the Los Angeles real estate market could be headed for a crash (see this link). To summarize: Maybe…soon…or never.
The author makes good points about the supply aspect supporting higher prices. (Do you know of any undeveloped land within 20 miles of the Pacific? Me neither.) However, the author also cautions against feeling pressure to buy more house than you can afford. And as a potential seller, do you sell and try to turn around and buy in the same market? You may be less far ahead than you think after transaction costs and you face the same issues of high prices and low inventory as your own buyer. In the end, the author concludes, buy when the time is right for you and don’t try to chase the market.
In my own opinion, Los Angeles may be the most resilient of all of the six “trophy” markets in the U.S. (the others being New York, Chicago, Boston, Washington DC, and San Francisco) unless/until work-from-home is phased out and workers again fill the high rise office buildings of the other markets and demand increases for homes/apartments nearer to those city centers. The sprawling and diverse nature of the Los Angeles market means many neighborhoods already feel like traditional suburban areas that city dwellers in other markets are fleeing to. And do I have to mention the weather? None of those other markets can compete.
While these advantages in no way guarantee increased prices forever in the Los Angeles market, an outright crash seems improbable. Add the current competitive mortgage rates of around 3% (and resulting competitive monthly payments), and there appears to be a lot of support for current and even higher prices.
Bitcoin, Dogecoin, on the other hand… Haha, I honestly have no idea. What do you think? Send me an email or text, I want to hear your thoughts!