End-of-year Market Numbers Show Strength

Southern California home prices surged 8.6% in November compared with a year earlier, tying an all-time high that underscores a drum-tight housing market with few properties for sale, according to a report released this week. The 6-county region’s median home price hit $505,000 last month, a nominal record last seen in September and, before that, in 2007 before the housing market collapsed. The region’s median home price hasn’t fallen on a year-over-year basis in more than 5 years. November sales, meanwhile, were essentially flat, down just 0.1% from a year earlier.

 The report, released by data firm CoreLogic, reveals a 7% price increase in Los Angeles County, which moved the County’s median price to $567,000. Beverly Hills condominiums (similar to the ones discussed above and pictured here) closed-out November with an average sales price of $1,147,000. CoreLogic reports a housing market that shows little sign of slowing down due to a combination of strong job growth, historically low mortgage rates, and a shortage of listings.

However, there are potential headwinds on the horizon: The tax bill signed into law by President Trump this month makes key changes to what households can deduct, including a new $750,000 cap on the mortgage interest deduction, and a $10,000 cap on a combination of state income and property taxes. Those provisions could crimp demand in some upscale neighborhoods and lead to price declines, according to some economists. Other market watchers have scoffed at that notion, saying the changes are unlikely to send prices down given the strong demand for housing in SoCal.