California is among the top places to invest in real estate and Los Angeles has consistently topped the list of locations when searching for a new home. But as more people relocate to the most populous state every year, L.A. is becoming more crowded and even more expensive. — Neil Shekhter, the CEO of NMS Properties, discusses the rising housing costs in the area and their effect on the market.
Before the housing bubble burst, California’s real estate prices progressively increased for over ten years. Homes in many California markets were high-priced well before the surge of subprime lending produced the great crash of 2008; consequently, property costs dropped sharply at that time only to begin rising again. The current trend, which has only been going on half as long as before the crash, shows no sign of relenting. According to a report published by data firm CoreLogic, real estate in Southern California jumped 7.5% within a course of a year last August and the median price of housing in Los Angeles County surged 9.4% to a record $580,000. Five years ago, median priced housing in L.A. County would have only been $323,000. Thus, for those looking to move to the area, there’s no better time than the present.
The real estate rebound, which has been fueled by historically-low mortgage rates, a slowly improving economy, and a shortage of homes for sale, is nowhere near its peak. The Daily Breeze interviewed six industry analysts and economists who believe that prices will continue to rise for at least two more years, if not longer. “Assuming the gross domestic product continues to grow at 2.5 percent and mortgage interest rates stay below 4.5 percent, Southern California home prices could be going up at 6 percent a year for the next six to seven years,” said Christopher Thornberg, a founding partner of Beacon Economics and a former UCLA economics professor. If his projection is correct, that would mean that median home prices in Los Angeles County in the year 2023 could reach $800,000.
Presently, housing units in L.A. are short by about 100,000 and should be adding at least 35,000 units a year to keep up with growing demand, but only 25,000 units are built annually. “It’s a case of low supply and high demand. Inventory is particularly low for homes in lower price ranges, while the need for more affordable housing continues to strengthen,” shares Neil Shekhter. A statewide poll shows that 42% of respondents from Los Angeles considered housing affordability as “extremely serious” and that 59% of L.A. County voters considered moving out of the area because if rising housing costs.
Neil Shekhter is the CEO and Founder of NMS Properties, a Santa Monica based real estate management firm. Founded in 1988, NMS Properties’ portfolio includes a combination of luxury, mixed-use, and affordable residential units as well as commercial properties. Growing up in the Soviet Union and eventually seeking refuge in the United States, Neil parlayed his hard work and determination as a young cab driver into purchasing taxis, which eventually led to an opportunity to enter the real estate market in the mid-1980’s. For nearly three decades since, he has dedicated himself to providing high-quality rental housing in Southern California's most sought-after locations, including Santa Monica, the Wilshire Corridor, Brentwood, Sawtelle Japantown and the San Fernando Valley.
Neil Shekhter - Founder and CEO of NMS Properties: http://www.neilshekhternews.com
Apartments For Rent In Los Angeles And More - NMS Residential: http://www.nmsresidential.com
NMS Properties - Real Estate Management Firm: http://nmspropertiesnews.com
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