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Q1 Real Estate Trends Take II: Strong Markets on the West Coast

Following my last post on Q1 activity in the housing market, we had some inquiries as to the other strong real estate markets (apart from New York). The two other strong markets are both on the West Coast – L.A. and San Francisco.

Prices in the San Francisco real estate market were unyielding in the face of a general first-quarter slump, when price softening is associated with a low-volume period in the real estate market and more significantly in the face of a national housing slow-down. L.A. real estate prices slipped, but only very slightly – by 2% (compared to Boston’s, which tumbled 10%).

In San Francisco, overall real estate prices in Q1 were up on average 3%, indicating a vigorous market. In the 2 Bedroom sector, the prices were down, but only slightly from $790,100 to around $770,000. The overall rent price was also down by a couple of percentage points – the average 2 Bedroom rental rate went from $3,230 at the end of Q4 to $3,100 at the close of Q1. We saw lower volume in both real estate and rentals, typical of the season, in San Francisco.

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In L.A., while real estate prices slipped 2%, rental rates stayed high (up 1%). The 2 Br property price shifted down from just over $660,000 to around $650,400. The average price of 2 Br rental moved up from $1,840 to $1,910. Again, the rental price movement was counter to both expected and observed trends in other parts of the U.S. In L.A. we also observed comparable numbers (relative to earlier periods) of both sales and rentals in the housing market. This is another sign of a healthy market.

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