L.A. home prices going up too much, too fast

homesale2.jpgThe latest Case-Shiller numbers show a 19.2 percent jump in May compared with a year earlier - not quite the pace of SF (24.5 percent) or Las Vegas (23.3 percent), but probably too fast to last much longer. At least that's how Zillow economist Svenja Gudell sees it. "It's increasingly critical that the average American homeowner not read numbers like today's Case-Shiller results and assume their homes must also have appreciated at these levels over the past year, or will continue to appreciate at these levels going forward," writes Gudell (via Business Insider), calling the recent gains "not normal, not sustainable and, frankly, not very believable." A big reason for L.A.'s price gains is the limited number of homes on the market (as well as the large numbers of buyers paying all cash). Potential sellers are holding off because they don't want to be stuck over-paying for a home - assuming they could even outbid deep-pocketed buyers. All of which speaks to a volatile, uneven housing market. Best case scenario over the next few months is cooling demand and increasing inventory.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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