Beyond movie industry and music industry there are a lot of other reasons why L.A. is one of your best options when you are in the hunt for your dream home. L.A. is still one of the best hunting grounds for the best real estate deals in spite of the lingering problems in the real estate market.
Consider these latest numbers on real estate markets when you plan to buy a home in L.A. There is an extended glut of homes for sale across all categories. For four consecutive years, sale of $1-M homes has remained in negative territory.In a year-to-year assessment, the number of units sold dropped by 23.8% in 2009. Over the past three to four years this continued drop in unit sold is mainly attributed to buyer's restraint, tight mortgage market and the significant drop of home price.
You have to remember that there are other factors to consider in as far as prestige homes are concerned apart from considering the basic economic indicators in assessing the condition and prospects when you buy a home in L.A.The decisions of buyers and sellers under this high-end category are influenced by a different set of parameters.The movements and trends in the market are not largely dependent on the conditions in the job market, inflation rates and interest rates but are discretionary.
Sales trends are slowly moving to positive grounds. All price categories posted a growth of 16.9% in 2009 as shown by latest market figures on home sales. However, you have to remember that prestige homes account only for 4% of the total home units sold in 2009. From 2008 where upscale home units accounted for 16% of total home units sold this is a big 12 percentage drop.
When it comes to units sold low-end homes are on top of the heap. For both first-time home buyers and real estate investors this market is the top choice. The perceived discount in prices of foreclosed properties in all markets in L.A fuels the strong appeal of this home category.On top of this, the FHA has implemented policies and programs aimed at supporting buyers in the low-end segment as well as the move-up segments of real estate markets in California.The main beneficiaries of these support programs are first-time home buyers with limited equity. The mortgage cap has been raised to $729,750 in several communities in California by the FHA.
When the sub-prime mortgage crisis happened , the upscale home category was not covered by the FHA support programs as they were able to move from harm’s way.The the effects of the bubble burst were weathered by the high-end homes and remained resilient in the face of lingering problems that prevailed in the other segments of real estate markets in California. Amid a more stable price trend there is the significant drop in sales averages in million-dollar home segment.
So, if you are planning to buy a home in L.A., it is essential that you carefully consider these market variables in order for you to make an informed choice.
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