Los Angeles home prices spiked sharply in February, reaching a new all-time high, according to a report from real estate tracker CoreLogic.
February’s median sale price in LA County was $580,000, nearly 3 percent higher than January’s median of $565,000 and well above the previous record of $575,000, where prices hovered between July and September of 2017.
The February figure is also a hefty 10.5 percent above the level where prices were one year ago, showing just how hot the market has been over the past 12 months.
CoreLogic analyst Andrew LePage points out that prices across all of Southern California have been “rising on a year-over-year basis each month for just shy of six years.” He explains that “the ongoing mismatch between housing supply and demand” may be behind the steady rise in home costs.
Buyer demand is high, but the number of homes sold in LA County dropped 3.1 percent since last February, and region-wide, the number of sales is well below average.
Real estate industry experts suggest that fewer newly built homes and reluctance among homeowners to sell may be contributing to lower sale numbers and higher prices—given that buyers are faced with limited options.
But rising interest rates could temper the rapid growth in LA home prices, says LePage, simply by making mortgage agreements unaffordable for many entry-level buyers.
Since June of 2017, CoreLogic has rated the Los Angeles real estate market as “overvalued,” meaning that sale prices are at least 10 percent above the level where long-term trends suggest they should be, based on the incomes of typical buyers.
That doesn’t mean there isn’t room for prices to keep growing. Though homes in LA have never been more expensive, the median price across all of Southern California is still 14.3 percent below its pre-recession peak, when adjusted for inflation.