With a white-hot housing market, many West Coast home buyers are learning that they need to pay incredibly high prices for older, less fashionable homes. Kenny Slaught notes that costs have been steadily climbing since 2008, with the Standard & Poor’s Case-Shiller home price index, showing that in April of this year Los Angeles home prices rose to their highest point since October 2007. Having grown far beyond mere recession recovery, Southern California’s large cities are closing in on their former peaks. Slaught says the turnaround is because of a number of factors, which include interest rates, job growth and supply and demand. As current 30-year, fixed-rate mortgages are hovering around 3.5% or less, these enticing numbers nearing 3.31 percent (the record low hit in November 2012) are pushing many to pursue buying a home. These historically low rates, coupled with a 2.4% gain in employment numbers in Los Angeles County and a 3.5% rise in Orange County, document why values have appreciated in an extraordinarily rapid manner. And although home prices vary greatly statewide, the sky-high asking price of higher-end homes outpaces all other states with the exception of Hawaii. The feverish demand for housing has overwhelmed the slim supply available, with many first-timers forced to opt for condominium-style units: available within a more modest price range.
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