Southern California Home Prices
Is Southern California an over-valued real estate market?
Nine of the top 10 overvalued American real estate markets are located in California according to SmartMoney's December article, What's Next for Home Prices.
Orange County, Ventura County, and San Diego are estimated to be nearly 60 percent overvalued. Los Angeles County was only 40 percent.
Does this mean that those 60 percent gains will be lost over time?
Not at all. Real estate is simple supply and demand. The issue becomes determining how much of the pricing imbalance is justified.
In the early '90s Los Angeles home prices dropped almost 30 percent when the market recorrected in tandem with an aerospace job bust. Many people moved from the area, and housing construction stopped.
When that bust started booming in the late 90's the area's population had, and continued to, rapidly expand. Combined with restictive building policies and high development costs, housing construction has continued to stall.
So overvalued, undervalued, it's hard to say. Nonetheless, real estate has without question, historically, risen in value. And supply and demand will always determine the price.
If you are interested in pre-qualifying for mortage click here to spoke with a Los Angeles area mortgage broker serving Southern California.
Nine of the top 10 overvalued American real estate markets are located in California according to SmartMoney's December article, What's Next for Home Prices.
Orange County, Ventura County, and San Diego are estimated to be nearly 60 percent overvalued. Los Angeles County was only 40 percent.
Does this mean that those 60 percent gains will be lost over time?
Not at all. Real estate is simple supply and demand. The issue becomes determining how much of the pricing imbalance is justified.
In the early '90s Los Angeles home prices dropped almost 30 percent when the market recorrected in tandem with an aerospace job bust. Many people moved from the area, and housing construction stopped.
When that bust started booming in the late 90's the area's population had, and continued to, rapidly expand. Combined with restictive building policies and high development costs, housing construction has continued to stall.
So overvalued, undervalued, it's hard to say. Nonetheless, real estate has without question, historically, risen in value. And supply and demand will always determine the price.
If you are interested in pre-qualifying for mortage click here to spoke with a Los Angeles area mortgage broker serving Southern California.
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