Los Angeles Real Estate Market Predictions 2016: A ‘Flat’ Year Ahead?

Are you in the “market” for Los Angeles real estate market predictions for 2016? You’ve come to the right place. MetroDepth analyzes current housing conditions, and compiles expert predictions and forecasts based on those trends. Here is our 2016 forecast for the Los Angeles housing market in 2016.

Los Angeles Real Estate Market Predictions for 2016

Let’s start with the general consensus and go from there. Most housing analysts and economists anticipate that home prices in the L.A. metro area will continue rising in 2016, as they’ve done over the last several years.

But we might not see gains quite as steep as those we’ve seen in the past. Home-price appreciation seems to be slowing in the area, due to normalization within the real estate market. As the market strikes a better balance of supply and demand (something that has been lacking in the past), house values will probably begin to rise more slowly.

So there’s your first Los Angeles real estate market prediction for 2016. Home prices will likely rise further between now and the end of 2016, but possibly at a more moderate pace than in previous years.

Zillow Forecast for L.A. Suggests Smaller Gains

In December 2015, the real estate information company Zillow issued a home-value forecast for the Los Angeles housing market. According to their data, house values across the city rose by 7.1% (on average) from Dec. ’14 to Dec. ’15.

Projecting forward, they expect a more modest increase of 2.7% over the next 12-month period (through the end of 2016). That’s for the city itself. For the broader Los Angeles County, Zillow expects home prices to rise by around 2.3% next year. This is based on their own proprietary measurement for tracking house values, which is called a Zestimate®.

Los Angeles panorama
Panorama shot of Los Angeles. Photo by Matthew Field. Enlarge

That’s a major slowdown in home-price appreciation, and it echoes some of the other predictions we’ve seen for the Los Angeles real estate market in 2016.

Other indicators show similar gains for the Los Angeles real estate market. For example, in November 2015, the widely cited Case-Shiller Home Price Index reported a 6.4% increase in L.A. house values from Sept. 2014 to Sept. 2015.

One of the Hottest Housing Markets in the Country?

At the end of 2015, Realtor.com published a list of the 20 hottest housing markets in the U.S. According to the report: “Our data team ranked the country’s 300 largest markets in terms of housing supply (measured by days on market) and demand (measured by listing views on our site) to come up with the top 20 hottest markets in the U.S. for this month.”

The Los Angeles housing market appeared at #12 on the list, suggesting that homes are in high demand in the metro area. This, combined with limited supply, is pushing home values upward. San Francisco was #1 on the Realtor.com list, in case you were wondering. In all, 12 California cities appeared in the top 20.

Disclaimers: This article contains forward-looking statements (predictions and forecasts) regarding the Los Angeles real estate market in 2016. Such statements should be taken with a grain of salt. They are educated guesses. This page also includes third-party data that are deemed reliable but not guaranteed. The publishers of this website make no claims or assertions about the Los Angles housing market in 2016.

Experts: Share Your Insight With Our Readers

Do you have some insight to share with other MetroDepth readers? What’s your prediction for the L.A. real estate scene? We welcome your input, especially if you are well-versed on this subject. You can share your thoughts by using the comment box below.

Brandon Cornett

Brandon Cornett has been involved with real estate marketing for over a decade. He is the creator of the Home Buying Institute and other housing websites. Contact Brandon

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