Home prices are still increasing in Los Angeles — but the state of the market is more nuanced than just numbers.
Exclusive data from Homes.com showed that in March, the cost of a house in the Greater Los Angeles area was 5.8% higher than at the same time a year earlier. In dollars, the median sales price climbed $51,000 to $926,000.
At that rate, Los Angeles ranked sixth among the 40 largest U.S. housing markets for price growth, and it was the only one in the West in the top 10.
Even so, March’s growth was a continuation of a pattern of deceleration, the data suggested. In January, home prices had grown 7.3% in 12 months. That pace slowed to 6.9% in February, and in March, it dropped by more than a whole percentage point.
Taken together, it’s a sign that the market is mostly being kept afloat by the ongoing shortage of housing supply, according to Ryan Patap, senior director of market analytics at CoStar.
“In spite of the economy and entertainment industry softening and interest rates being high, Los Angeles still faces a long-term supply crunch,” he said in an interview. “So, there are headwinds, but there’s still price growth.”
Put another way, buyers are willing to pay more to get into a house in Los Angeles because their options are so limited. That’s given prices room to keep climbing, albeit at a slower pace.
Price growth has slowed on a national level, as well. In December, annual growth peaked at 5.6%, according to Homes.com data.