In summer 2007, the Los Angeles County median home price hit an all-time high of $550,000. It soon plunged as the housing bubble burst and the national economy crashed.
Now the median, the point where half the homes sold for more and half for less, has finally passed the heights of 10 years ago — the result of an improving economy, historically low mortgage rates and a shortage of listings.
According to a report released Wednesday from real estate firm CoreLogic, the county’s median price in May rose 6.8% from a year earlier to reach $560,500 as sales jumped 4.8%.
When adjusted for inflation, May’s median remains 11% below the 2007 high, though the nominal record comes amid fresh concerns over the high cost of housing in California.
Still, many experts say today’s price increases appear more sustainable than those a decade ago.
A steadily improving economy — not risky loans — is driving demand now, they say. And with few homes on the market, especially in California with its persistent housing shortage, prices are rising as expected.
“We just don’t build enough housing,” said Leslie Appleton-Young, chief economist with the California Assn. of Realtors.
Even so, for potential buyers who can scrape together a down payment and get a loan, rock-bottom interest rates mean monthly payments are actually cheaper than during the height of the bubble, according to the Realtors group.
At the end of 2006, only 9% of L.A. County households could afford the median-priced house, compared to 29% at the beginning of 2017, according to the Realtors, whose calculation also takes into account wages.