REAL ESTATE NEWS (Los Angeles, CA) — What’s happening now with the L.A. urban property market? More stagflation! The numbers are in, and they show continuing economic stagnation and price inflation, with fewer buyers, fewer transactions, yet selling faster, with higher prices for urban homes:
2021: Listings 59; Days on Market average / median 55 / 34; Price med / avg $575,000 / $644,978
2022: Listings 42; Days on Market average / median 33 / 21; Price med / avg $629,500 / $778,675
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DTLA sold home property values statistics show that inflation is still the name of the game.
Housing market on fire in 2020, unsustainable in 2021 and beyond — without runaway inflation.
For 2021, the real estate market is expected to be more volatile, varied and less predictable than normal. The national housing market is now overheated as compared to five years ago. Greater Los Angeles Area single family home prices are expected to plateau, while urban condominium prices shall continue to fall. Los Angeles, New York and other big city urban center property prices have already been falling for several years.
Price inflation normally has an upward price pressure on most things, including residential properties. Inflation is correlated to a reduced value of the U.S. Dollar. The federal government and Federal Reserve have indicated that they plan to increase spending, increase the national debt, increase the money supply, increase quantitative easing and increase radical new measures to stimulate the economy and liquidity. Most of these measures reduce the value of the U.S. Dollar in the future, resulting in inflationary pressures that build up over time, which can result in sudden, unexpected runaway inflation, immediately followed by rising interest rates. | Blog Video
While the Federal Reserve chairman downplays real estate froth, Chairman Powell agrees that rapidly rising home prices are unsustainable. Many housing markets have doubled or tripled in price since 2011.
More and more economists and billionaire investors have been raising concerns about runaway national debt approaching $28 trillion, tidal wave of corporate debt and crushing personal debt. Unusually large, rapidly growing debts can indicate looming financial disaster in the form of a debt bomb explosion, which could potentially wipe out even the safest of retirement funds. High debt increases inflationary pressure for the future.
The primary counterforce keeping prices down is a declining GDP and surge in unemployment — The Greater Depression of 2020s. Stock market volatility tends to have a neutral impact on the dollar value and housing market provided that the long-term end result is near normal.
As 2021 is largely a repeat of 2020 in many ways, we can see most home prices continue to accelerate only if the federal government and Federal Reserve loosen purse strings even more than they did in 2020. These extreme measures are unsustainable, as 2020 already created price shocks in real estate and in many products while the average income went down, resulting in reduced productivity and declining net worth for the average American. Inflation is linked to inefficiencies and detrimental effects such as currency crises, shortages and decreased overall standard of living. The only way to keep pumping up the housing market is by pumping up inflation and costs of living in general.
The most practical ways to protect one’s finances, and to benefit from inflation, is by owning assets such as gold, bitcoin, stocks and real estate. Renters and paycheck-to-paycheck consumers tend to suffer the most when severe inflation takes hold.
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