Past trends in home-value appreciation point to current price reductions.
Did you know that our real estate market has been appreciating for 11 years? That is the longest annual appreciation we have seen in a very long time! Last year alone had 20% appreciation in the Los Angeles market. However, some sellers now have to reduce their asking prices.
A recent study found that in Los Angeles and Orange County, approximately 10% of the homes currently on the market have needed a price reduction. That ranks about 33rd in all metro areas. Nationwide, about 12% of homes on the market have needed a price reduction, and the highest city is at 16%.
“The areas with a higher percentage of price reductions had a higher amount of home-value appreciation last year.”
Interestingly, the areas with a higher percentage of price reductions had more home-value appreciation last year. The opposite is also true—homes with fewer price reductions had less annual appreciation last year. I think this correlation is worth looking into!
We will follow this trend closely and keep you updated. For now, know that it’s still a great time to purchase real estate, and the housing market is becoming a little bit more balanced. If you have any questions about any of these things, don’t hesitate to call or email me!