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 offers 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. Housing Market: Tiny Gains Ahead?

In September 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 4.5% (on average) from Sept. ’14 to Sept. ’15.

Projecting forward, they expect prices to rise by a mere 0.8% over the next 12-month period (through September 2016). That’s a major slowdown in appreciation, and it echoes some of the other predictions we’ve seen for the Los Angeles real estate market in 2016.

Personally, I feel 0.8% is a tad conservative. I think home prices in Los Angeles could rise by 3% or more during 2016. A lot of real estate folks will tell you the Zillow numbers don’t hold water. I’ll leave that for you to decide.

Other indicators show even larger gains in the Los Angeles real estate market. For example, in August 2015, the widely cited Case-Shiller Home Price Index reported a 6.3% increase in L.A. house values from June 2014 to June 2015. It also showed a 0.9% increase from May to June of this year. This is why I think Zillow’s prediction for the Los Angeles real estate market is dubious. Their entire 12-month forecast for home prices is lower than the one-month gain mentioned above. There is a good chance appreciation will slow in 2016. But will it slow by that much? I don’t see how.

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’re educated guesses and nothing more. 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.

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