Why are the price of homes going up with the population going down? (Los Angeles: renting, mortgage)

[Bubble99]

If you look at the population of LA it is going down and lots of people are leaving but the average price of homes are still going for $600,000 to $700,000.

2020 population 3,898,747
2022 population (est.) 3,819,538

And in 2010 populations 3,792,621

[CA4Now]

Lack of inventory. And with mortgage interest rates rising as much as they have, many people are reluctant to sell.

[Thekdog]

In addition to low supply, costs to build new housing have increased

[Des-Lab]

Isn't LA by and large built out? Unless you're talking about places like Temecula, Santa Clarita, the hills east of Irvine, or out in Beaumont, where, exactly is anything new being built? Or are older structures being torn down en masse?

[Kings Gambit]

Originally Posted by Bubble99

Why are the price of homes going up with the population going down?

If you look at the population of LA it is going down and lots of people are leaving but the average price of homes are still going for $600,000 to $700,000.

2020 population 3,898,747
2022 population (est.) 3,819,538

And in 2010 populations 3,792,621

Home prices arent tied to population count. Its more about inventory, rates and as everyone knows - location,location,location. Talk to any LA realtor and they'll tell you even now, in some of the least desirable areas homes are selling for more than list prices because its a sellers market. Lets face it, Los Angeles will ALWAYS be desired which is why there is often bidding wars on homes sold. In my neighborhood, developers are building these really really nice homes that are often being sold before they are finished being build because of the low inventory and overall desirability.

Oh, as a side note, its a bit of a fluke that LAs population went down. Was due in part to people moving home (back to their home states) due to covid shutdown. But with things picking back up, they (along with thousands of others) will be trying to move back to LA.

[Igor Blevin]

Massive inflation distorts markets.

It takes a long time for markets to rebalance themselves and for the pendulum to swing the other way.

Meanwhile, bad government politicies can keep the market distorted for a very long time.

There is a generalized correlation between home prices and incomes, but it is not like some forumla. That is why some an expensive city can go decades with people paying 40% of their income in housing while some cheap city can go decades with people paying 20% of their income in housing.

It seems like income should be the only factor, but you have to realize that while earners may not be buying overpriced homes, they may be purchased by investors, or by people from out of state who earn more or have greater net worth than locals who keep pushing values up.

Here in Knoxville, an influx of out-of-state money is keeping the housing market hot.

[Bubble99]

Originally Posted by Igor Blevin

Massive inflation distorts markets.

It takes a long time for markets to rebalance themselves and for the pendulum to swing the other way.

Meanwhile, bad government politicies can keep the market distorted for a very long time.

There is a generalized correlation between home prices and incomes, but it is not like some forumla. That is why some an expensive city can go decades with people paying 40% of their income in housing while some cheap city can go decades with people paying 20% of their income in housing.

It seems like income should be the only factor, but you have to realize that while earners may not be buying overpriced homes, they may be purchased by investors, or by people from out of state who earn more or have greater net worth than locals who keep pushing values up.

Here in Knoxville, an influx of out-of-state money is keeping the housing market hot.

Does LA have lot of abandoned homes or people buying lot of homes and renting them out? What about investors buying up homes and homes with no one in them?

Are people starting to move back to LA?

[CA4Now]

Originally Posted by Bubble99

Are people starting to move back to LA?

It doesn't look like it.

Projections from the state Department of Finance....show fewer people living in L.A. County than are currently here now.

Recently updated population projections show Los Angeles County losing over 1.7 million people between now and 2060, a decrease of more than 17% from the current total of around 10 million.

L.A. County, the state’s largest, is expected to lose far more people in total numbers than any other county. The county is forecast to lose a higher proportion of its population than all but six others — all of which currently have under 50,000 residents.

https://www.latimes.com/california/s...ifornia-exodus

[BGS91762]

I think a lot of the “everybody is leaving” is media hype”. Yes people are leaving but others are also coming. I live in the IE and it’s growing like crazy and home prices keep going up. Most of those coming east are those leaving LA/OC to afford a house.

[NJ Brazen_3133]

Originally Posted by Bubble99

If you look at the population of LA it is going down and lots of people are leaving but the average price of homes are still going for $600,000 to $700,000.

2020 population 3,898,747
2022 population (est.) 3,819,538

And in 2010 populations 3,792,621

People only wanting live in more and more exclusive areas, and cramming themselves together as much as possible in only a few select areas.

Plus foreigners and corporations.