The recently released Insight & Outlook from Freddie Mac in August demonstrates that there is no single housing statistic that reliably identifies when a housing market is overvalued or when house prices are likely to fall. Looking back, from 2003 to 2007, U.S. house prices rose 8.6% annually and 39% overall, peaking in 2006.
In retrospect, the national housing bubble that followed seems obvious and predictable but at the time expert opinion was divided…most agreed price increases couldn’t be sustained but were divided on the future price path. One highlight in the report showed an increased projection of 2015 home sales to 5.73 million units, which would be the best year since 2007.
In other housing news, home equity has increased by nearly $1 trillion in the 12 months ending in May 2015 and is now at the highest level since 2007, according to Black Knight Financial Services Mortgage Monitor. You’ve all heard it, “location, location, location,”— well here’s why. Black Night found that, of the $4.5 trillion in tappable home equity, $1.7 trillion, or 39%—is in California, dwarfing by a factor of six the second state, Florida, with an estimated $278 billion. Los Angeles alone has 14% of the nation’s total available equity, with over $600 billion in equity.
What’s happening in the local housing market? Check out the chart below to see the median sales prices for single-family homes in the Beach Cities and Palos Verdes Peninsula over the last four years and go to page 100 for a more in-depth look at current active / closed sales date for the entire South Bay in 2015.