No bubbles here... at least not yet. (And unlike a lot of you, we're praying the bubble doesn't burst. Last thing we need is to be paying a higher mortgage than what our home is worth.)
According to the L.A. Times, the median price for a home in Los Angeles County hit $500,000 for the first time in March.
That's double the median price of a home here just four years ago. Sounds like a bubble to me. (Sssshhh! No bubble talk!)
The skinny:
With Los Angeles' median home price doubling in such a short period — giving homeowners more equity than they imagined a few years ago — it's no wonder that Los Angeles appears on many lists of the nation's most overvalued housing markets. That suggests it could be vulnerable for a repeat of the early 1990s, when the county was one of the few markets in the nation where prices declined.
But a lot has changed since then. The region's economy is much more diverse and less dependent on any single industry, such as aerospace, where a sharp loss of jobs due to defense cutbacks sparked the early 1990s collapse, according to industry observers.
There also has been much less new-home building here than 15 years ago, so vast tracts of unsold homes are hard to find
Los Angeles is the most recent county to join the half-million club in Southern California. Orange County was the first when the median price for existing homes reached $500,000 in January 2004. Ventura County followed a few months later when the median hit $500,000 in June 2004.
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