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Key Study from UCLA Shows Los Angeles Housing Market a Safe Bet Despite Rising Prices

What some originally described as a potential real estate bubble in Los Angeles — with all-cash offers and frenzied bidding wars — is actually the midpoint of a steady housing market recovery, analysts at UCLA’s Anderson School of Management said this week.

The UCLA Anderson forecast released Monday noted that Los Angeles is only three years into a rebound that started in 2012. Home prices have since climbed 27 percent. History suggests there will be four more years of price increases and home values will go up another 35 percent before there is any sort of correction.

The reason comes down to a fundamental imbalance: there’s lots of job growth, but because of strict building and environmental regulations, there will be very little increase in the housing supply.

“That means you will not expect to see housing more affordable during the next few years,” said Jerry Nickelsburg, a Senior Economist at UCLA’s Anderson Forecast. “In fact, just the opposite.”

 

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