With houses in the Los Angeles area fetching record prices, sellers pocketed some of the largest profits in the nation in 2017, according to a new report from Zillow. Across L.A. and Orange counties, homeowners last year sold homes for around $137,000 more than the price they paid for the residence, amounting to a 33.1% gain in value.
In the city of L.A., jumps in value were even more dramatic. Prices in 2017 were nearly 40% higher than what the seller paid, with a median dollar increase of $175,000. Greater L.A. was one of just 5 of the nation’s 35 largest housing markets where homeowners saw the price of their home increase by 6 figures between buying and selling.
According to the report, the median length of time L.A. sellers owned their homes before selling was just over 9 years in 2017. That means that many of those who listed houses for sale last year bought during the Great Recession, when prices dropped off from levels that today’s home prices have only recently surpassed.
Prices in L.A. County increased 3.2% in May, according to a new report from real estate tracker CoreLogic. For the 4th month in a row, the county’s median home price bested an all-time record. It now stands at $609,000—nearly $20,000 higher than in April. Prices were also up 8.4% over a year ago, and May was the first time ever that the L.A. median price bested $600,000.
In spite of soaring prices, homeowners aren’t exactly rushing to sell their properties. According to CoreLogic, fewer homes are on the market than usual, and the number of overall sales is down 4.2% since May of 2017. On the flip side, region-wide sales of homes priced over $1,000,000 are up nearly 8%.
Mortgage interest rates have also increased (roughly 0.5%) in the last few months, inflating monthly costs for buyers. Payments across Southern California have grown about 16% over the last year, making things especially tough for buyers on a budget.
Could lenders’ pain be your gain if you’re shopping for a home mortgage? Maybe. Though it hasn’t been in the headlines, some mortgage companies are having a challenging year. Inside Mortgage Finance, a trade publication, reports loan originations “tanked” during the first 3 months of 2018, hitting their lowest level in 3 years.
Possibly as a result, competition for new home-purchase loan applications is on the upswing. One bellwether: LendingTree, the popular online marketplace where banks and mortgage companies compete for borrowers’ business reports that shoppers for home loans are receiving significantly more offers on average through its lender network compared with a year ago.
Another indicator: Lenders appear to be offering slightly more attractive deals. The Mortgage Bankers Association’s mortgage credit availability index—which monitors credit score requirements, down payments and other key underwriting terms at major lenders—improved by 1.9% for conventional (non-government) mortgages in April. This suggests posted mortgage terms were slightly more favorable to consumers than they had been previously.