The real estate market in Los Angeles is currently in very high demand. However, we are still susceptible to the major trends driving the market across the country. Some of these trends will have a direct impact on Angelenos looking to purchase a home. At Aspire, we work with many first-time home buyers in up-and-coming neighborhoods. We watch these trends to help our clients understand how the market will impact them. Here are the three biggest 2018 real estate trends we expect to influence our local market.
Home Prices Will Flatline
Home prices have been on a sharp incline over the past two years. Though prices are not expected to decrease over 2018, they are expected to flatline. There are many factors influencing the changing price including the caps on mortgage interest and property tax deductions in the new tax bill. Some experts predict that mortgage rates might reach 5% by midyear. So Los Angeles buyers should act fast if they are looking to purchase a home this year to guarantee low-interest rates.
Inventory Will Stay Low
One of the biggest drivers of the price of homes has been the lack of new construction. After the housing market crash a decade ago, home building has not picked up. Adding the complexities of zoning laws in California, new homes are not being built at the pace of demand. This has been very beneficial for people selling homes because it means that homes have moved off the market more quickly and often for more than the asking price. With prices finally flatlining, 2018 may be the first buyer’s market in a while.
Rent Prices Will Still Be A Factor
Rent prices in high-demand markets like Los Angeles will continue to increase. Residents will have to weigh the costs and benefits of renting versus homeownership. This will be especially complicated with the new tax laws. Making this decision will require a real understanding of the full costs of homeownership. Fortunately, in the neighborhoods, we specialize in home prices are still comparably low.
Overall, the 2018 real estate trends will continue much like those in 2017, with some minor changes. If you are considering buying a home this year, talk to our real estate experts. We can help put together a great strategy so that you can benefit from some of these coming market forces. Call us today to learn more!