The housing market is off to a good start this year. And it may finish 2013 on a
good note, too. Los Angeles now ranks among the nation's best housing markets
for a couple of traits, which is better than being among the worst.
a California comeback.
Stan Humphries, chief economist at Seattle-based
Zillow Inc., a national real estate company, predicts that this year the Los
Angeles metro area home prices will appreciate 7.1 percent from 2012, the fifth-
strongest gain in the nation.
top market? That would be the severely affected Riverside area, where prices are
expected to increase 12.5 percent. Sacramento ranks second with
11.9 percent appreciation and San Francisco is fourth with expected appreciation
of 7.3 percent.
The only top-five housing area not in California is
third-ranked Phoenix, where Humphries predicts prices will rise 8.5 percent. Of
course, there is a reality check. Prices fell so much during the downturn there
is no place to go but up.
"I think the key factor was the substantial
decline in home values. In the L.A. metro area, it was about 33 percent from the
peak," Humphries said of the price trajectory now.
The reason is not
complicated. Inventory is still at or near record-low levels in many areas, and
demand has powered up. Fewer homeowners are also now struggling with homes worth
less than their mortgages, but the problem is far from over.
appreciation is pulling more people back above water, but there still are a
tremendous number of people below water," Humphries said.
foreclosed properties have also diminished and sales of higher-priced properties
For example, market tracker DataQuick reported this week
that in Southern California's move-up market - homes costing between $300,000
and $800,000 - sales soared 49.6 percent in January from a year earlier. Sales
over $500,000 jumped 74 percent and sales over $800,000 rose 84.2 percent.
Conversely, the number of homes that sold below $200,000 fell 23.5
percent while sales below $300,000 declined 12.2 percent. And this week
Emoryville ZipRealty noted that a sellers market is taking hold in some areas.
The company said that last year in Los Angeles homes sold for an average
of 100 percent of the listing price. California also nailed four of the top five
spots on this list. San Francisco topped the list with homes selling for an
average 102.5 percent of the asking price followed by San Diego at 101.3 percent
and Sacramento at 100.9 percent.
"A limited inventory of homes on the
market, combined with the extremely low cost of mortgage financing, has resulted
in homes selling above asking price in many western markets," Lanny Baker, CEO
and president of ZipRealty said in a statement.
California real estate
might not be golden yet, but it's starting to come out from the shadows.