Los Angeles County Home Prices
Still on the Rise |
By Jeanette Joy Fisher |
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California's real estate market may be slowing down, but the median
home price in Los Angeles County set another new record in March,
climbing above the half million dollar mark and settling in at
$506,000. That figure is more than twice the median price for the
area just four years ago.
That's good news for home sellers
perhaps, but not-so-good news for folks who are looking to buy a
home. An economist at the University of California recently said
that if a homebuyer financed a house at the median price using
conventional financing and putting down 20 percent (which would
require some $112,000, excluding closing costs), the annual family
income necessary to pay for the mortgage and taxes would need to be
at least $120,000.
The rising home prices in Los Angeles
County have been offset somewhat by fewer sales, accompanied by few
homes going on the market, which are both indicators that although
the prices of homes may be rising, the overall market in the area
appears to be slowing down.
Nationwide, home prices have
continued to rise, and people have been able to tap into their
increased equity by taking out home-equity loans and lines of
credit. In fact, nearly one third of all homeowners have already
done that, according to a national survey conducted by the Gallup
Organization. That same survey suggested that nearly half (43%) of
the homeowners who tapped into their home equity used that money to
improve their homes. The next most cited reason (30%) was for fun
stuff like vacations, cars, and boats. Some 14% of the homeowners
surveyed said they used their loans to consolidate debt, followed by
paying for emergencies (4%), education (3%), and medical expenses
(2%).
As home prices continue to rise at double-digit rates
in many areas of the country (or double in the past four years, as
was the case in Los Angeles County), an Experian-Gallup Poll found
that nearly two-thirds of all Americans (60%) expect prices to keep
rising. On the other side of that coin, a large majority (85%) of
homeowners said that it's not a good idea to take on any more debt
in the current economy. That's not good news for those who study
things like consumer confidence.
The bottom line: If you're
looking for a home in LA, it may cost you twice as much as it would
have four years ago, there are fewer homes to choose from, and you'd
better have a good family income if you hope to continue to live in
your home once you find it.
Copyright 2006 Jeanette J. Fisher |
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