Podcast - 084: Home Appreciation in Los Angeles County and how it impacts you!

In this episode, realtor Anthony Luevanos and lender Angel Luevanos explain what home appreciation is and how you can leverage this when purchasing your next home.

“Home appreciation relates to a house or investment property increasing in value over a period of time. A raised value of a property can lead to the owner making a profit upon selling it or earning more income through monthly rent from their tenants. Increasing home value also leads to more equity in the home” - Rocket Mortgage

Since 1891, home price appreciation nationally has been about 3.5%, but that doesn’t mean you can expect that for your city. 

Let’s look at the appreciation rate for Los Angeles County:

  • Since 1990, the appreciation rate for single-family homes has been roughly 4.6% annually

  • In the last ten years, the appreciation rate has been roughly 9.53% annually

  • In the last five years, the appreciation rate has been roughly 8.71% annually

So we can see that appreciation in Los Angeles County is much higher than the norm of 3.5% annually. Yet, within this are the appreciation rate for individual cities, which also vary. 

Let’s look at two examples:

  • Culver City: five-year appreciation rate is 6.14% annually

  • Compton: five-year appreciation rate is 10.93% annually

See, one is well over the 8.71% Los Angeles County appreciation rate; the other is well under. You’ll notice that the appreciation rate is lower where home prices are higher. It’s not the case in every scenario, but it usually works out for most cities.

So how can you use this data to help you?

Appreciation is a crucial dictator if you are looking for a sound investment that will build value over time. Especially if you plan to cash-out refinance and use the equity towards another purchase to build your portfolio, or if you are buying your primary residence with less than 20% down, this will help you figure out your timeline for getting to 20%. 

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Anthony Luevanos