Are Pasadena Home Prices Headed Higher?


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Pasadena home prices which were in a nose dive for about 2 1/2 years are rebounding. For all intents and purposes, it appears the bottom was reached in January 2009

Pasadena Home Prices

Pasadena Home Prices

and we have been in recovery mode since then. With the high recorded in December of ’06 at about $710,000 and then falling to $425,000 in December ’08. $300,000 in equity disappearing to the tune of about $10,000 per month.

This of course is an over simplification but it does suggest just how quickly market forces can affect change. Many people thought that if the market did change it would be gradual and exhibit more of a round curve as prices quit rising, began to level off and then eventually decrease.

The Future of Home Prices

Can the same be said when home prices begin to rebound? With the upward spike seen over the last several months the question has to be asked “Are we headed for another bull market in the housing market or are we just seeing short term optimism”? The rise in housing prices during the first part of the decade was associated with low interest rates and a very friendly monetary policy where everyone who wanted a loan and could sign a loan application received a mortgage. It’s not that easy anymore. Now only one of those criteria exists in the form of low interest rates.

Our home prices here in LA County and along the right and left coast may always be more volatile than other parts of the country simply because we have a fixed supply of housing. Our increases will be sharper and our declines will be deeper. Real estate price increases or decreases of +/- 3% are found in middle America.

The recent run up in real estate activity locally and nationally may prove one thing. Low interest rates have the ability to overcome economic conditions that are not exactly ideal. Maybe this has to do more with people’s approach to housing and the fact that you have to live somewhere, you can either pay rent or pay a mortgage and the possibility that when people do buy real estate they are looking long term.