As the economy continues to shift amidst concerns over inflation, rising gas prices, and a bear stock market, we take another look at the data to provide you with a comprehensive October Los Angeles real estate updated. As interest rates continue to climb, the Los Angeles market remains strong with prices continuing to climb, although at a slower rate than prior years.
Interest Rates Spike, Again
With the Federal Reserve continuing to aggressively raise the target interest rate, mortgage interest rates saw a significant spike in the past month. This is likely primarily due to the Federal Reserve’s announcement in September that it is looking to a target interest rate of 4.25-4.5% by the end of the year, as opposed to earlier lower estimates. The Fed is expected to increase the target interest rate by another 3/4 points in November. Assuming the Fed sticks with this plan, mortgage rates will likely stabilize after spiking this past month.
Prices Continue To Climb
Nonetheless, prices continue to climb throughout Los Angeles County, albeit at a slower pace than recent history. Prices in September climbed in comparison to August, and the average sale price sits slightly above the average sale price at the same time last year. Thus, while prices in other parts of the country may be seeing a decline, the market in Los Angeles continues to see demand outpacing supply, thereby driving the price of homes up.
What’s Next?
The spike in interest rates in September will likely put additional downward pressure on the market. We expect the average sale price in October to be below that of September. How, it is important to note that even during a strong market, prices in October tend to be lower than September due to the seasonal nature of the real estate market. We do not anticipate a substantial drop, and prices will likely remain above where they were at the same time last year.
If you would like to further discuss this issue, or how Esquire Real Estate Brokerage can help you in the Southern California real estate market, feel free to give us a call at 213-973-9439 or send us an email at info@esquirereb.com.
