by: Kelsey Pudloski
original post: https://www.livabl.com/2021/01/la-housing-market-gained-value-2020.html
Photo by Dillon Shook on Unsplash
Home to America’s most expensive residential listing and scores of other exorbitantly-priced spec mansions, it’s no surprise that Los Angeles is one of the highest-valued real estate markets nationwide.
As home prices jumped 9.3 percent in 2020, the value of LA’s housing stock increased by $262 billion, more than any of the country’s 50 largest metropolitan areas. That’s according to a new Zillow analysisAMP measuring US housing market gains, which found that Los Angeles-area homes are now worth a total of $2.8 trillion. Between 2011 and 2020, its valuation surged by $1.36 trillion.
LA is the second most valuable residential real estate market overall, falling behind the New York metropolitan area, worth an estimated $3.1 trillion. The gap between these two high-priced metros is narrowing, however. In 2020, The Big Apple’s housing stock captured only $57 billion in combined value. Seven metros, including comparatively smaller markets like Boston, Washington, D.C. and Seattle, recorded higher gains than New York last year.
At the state level, California accounted for more than a fifth of the country’s total housing value, representing $7.8 trillion. The Golden State is home to four out of the 10 highest-valued metropolitan areas in the United States — Los Angeles, San Francisco, San Jose and San Diego.
“To put that $7.8 trillion statewide total in perspective: It’s about the same amount as the total market cap of the British and European stock exchanges (London and Euronext),” wrote Zillow Economist Treh Manhertz.
Looking at the US market as a whole, the housing stock gained $2.5 trillion last year. Appreciation of existing homes equaled $2.2 trillion, while new construction homes contributed $274 billion.
Record-low mortgage rates and changing lifestyle needs prompted millions of Americans to search for a new home, sending prices skyward amid declining inventory levels. To help meet the demand, homebuilders ramped up construction to the highest pace in over 14 years.
“Add that together and you see why the housing market gained more than in any year since the Great Recession,” concluded Manhertz.