Working in the real estate industry throughout these past 5 years has been (for lack of a better word) crazy. Back in 2006 the median home price in Los Angeles County was $584,800. Fast forward five years and in 2011 the median sale price was $305,000. Clearly this has been devastating to those who bought homes at the height of the market but it is creating opportunities for buyers as housing becomes more affordable. Of course no one wants to buy a house only to have the value decrease and that is the $1000 question...if you buy now is your property value going to go down? There are varying opinions on this topic but my belief is that we are now finally at the bottom.
Now I'm operating simply off of what I have seen in regards to real estate listings, sales and property appraisals here in the Los Angeles area. Most neighborhoods are in fact seeing prices that are steady, some increasing slightly, other decreasing slightly. One of my clients bought a home last year for $220,000 and his appraisal just came back at $260,000. This particular client spent nearly a year looking for the right deal on the right house and it paid off. Another client I have who bought around this time last year wanted to refinance but the value on his house is exactly the same as when he purchased it. His house search was much quicker and while the home he bought was purchased at the right price for that market, his value has not fluctuated.
Here is a link to a 5 year chart of home prices in various Los Angeles regions. As you can see, prices have not come down much over the past two years.
This link is to an article written by one of the most highly regarded (and technical) economic blogs on the web.
Let me know what you think, has the market hit it's bottom or will prices go even lower?