L.A. Market Trends - What do you think they mean?

[Goral Khatta]

Hello everyone,

I live in Los Angeles , just moved here pretty recently ( within 4 months). I am currently working with a small real estate boutique. Its a great real estate investment company. We specialize in the foreclosure market. We work with short sales, REO, and rehabing many homes. All our leads come from pre-foreclosures (Notice of default stage) , foreclosure stage (Notice of trustee sale).

So now my whole point is......

I know a lot of bankers, lenders, and private equity companies are PUSHING, and I mean PUSHING HARD for foreclosures. These big lenders want these properties off their books, obviously  if anyone has seen the home prices lately you know why these banks would do this. Prices are insanely high and prices keep rising. 

The amount of foreclosures are getting so bad that banks can even continue a foreclosure process even if you tried filing  a couple skeletal Bank Ruptcies. The laws are so twisted in this State in the favor of the big banking system and lenders. 

on top of all of this, the average household income is dropping in this City while the home prices are rising rapidly. 

Interest rates have also risen to an average par of 3.8% to 4.5% 

So with this being said, 

DO you guys think this Los Angeles market is in for a bust? Im curious on thoughts. 

[Josh Gorokhovsky]

I agree with @Dorian Jones in that people aren't going to stop buying, rather they will buy in different areas. We may see a drop off of property purchased in certain cities like West Hollywood, Santa Monica, Venice, etc where prices aren't affordable to the majority, but other cities will begin to thrive. Someone that was willing to spend $1.5M to live in West Hollywood 2-4 years ago won't pay $3M for a house there now, rather they will still pay $1.5M but in Silverlake instead.