Luxury home values stabilizing in Southern California
February 23, 2012 by Mark
The real estate market is still recovering nationwide, but things may finally be looking up for big-ticket homes in Southern California. The California housing market was hit particularly hard, especially in high-rent areas like Brentwood or Beverly Hills. But the latest data suggests that the housing market may have finally stabilized.
One big difference is that there’s an increased demand for these homes. After the housing bubble burst in 2007, fewer buyers were willing to take risks on investing in new homes, and were more often attracted to lower-cost homes. As such, the supply of luxury homes, which increased as many homeowners found themselves unable to afford their mortgage payments, was far too large to meet the demand, and prices plummeted.
Price decreases have gradually slowed down since the bailout in 2008, but until now a quarter has never reported significant gains. However, the Prestige Home Index reported on February 22nd that luxury home values for the fourth quarter of 2011 remained steady, and demand for these homes had steadily increased throughout Southern California.
There are still some areas affected by decreased values – Los Angeles saw slight decreases, for example – but overall, gains in other regions like San Diego balanced it out, and Southern California’s housing market seems to be on the mend. All in all, this is the ideal time for potential sellers – whether professional realtors or private sellers – to start printing flyers, hitting the pavement, and putting their luxury properties back on the market.