Los Angeles home values are rising and that’s great news, but let us not forget our lessons from the bubble! The bubble showed us that atypical circumstances that occur in the real estate marketplace, can lead to fake value! Current atypical conditions include properties being listed for 20% or more than what the recent sales comparables support, listing agents not accepting offers with appraisal contingencies and buyers paying over asking price, (www.WalshStreet.net/Pre-ListingAppraisals). All of this happening after five years of market decline, many properties still being sold as short sales, unemployment rates still high, income levels declining and many more foreclosures to come! A few positive words in the media about real estate, doesn’t mean property values automatically go back to 2006 prices.
Let’s be real, this positive spike is being fueled by low inventory, anxious buyers, sellers who have been waiting to make a move for six years or longer, federally controlled “low” interest rates, investors and the market going into its seasonal high cycle. All but the latter are atypical market conditions. Meanwhile, all other economic indicators remain bleak.
Yes, Los Angeles home values are rising, the question is, “have you learned your lesson”?
Or will your inflated bubble have to burst again before you get it? “Fool me once, shame on you; fool me twice, shame on me!