Fluctuating home prices in Southern California: What causes this?

Home prices are continually changing. Over a long enough period of time, property values normally go up; but, of course, in real estate there are no guarantees.

When your property appreciates you have a larger asset to borrow against, and you make a larger profit when you sell. There are many different reasons why property values in Southern California change.  So, how will you know what you're investing in presently will appreciate over time? Choosing an agent who understands the factors that influence local prices is the most important aspect to consider.

What is the number one factor impacting real estate appreciation? Many believe that it's the economy. It goes without saying that there are some issues on a national level that affect your property's value: unemployment, mortgage rates, inflation, and more. However, the most significant things that figure into your home's value are particular to the local economy and residential market.

Location in a community - Proximity to schools, jobs, and amenities also have a significant effect on all home buyers' decisions. So these regions consistently appreciate, or retain their value, best.

The latest home sales - Are homes on the market 30, 60, or 90 days or even longer? What was the selling price compared to the asking price? A lot of data can be obtained from public records, but a good agent with a login to the local MLS will usually provide a more complete picture.

The appreciation history - Is the neighborhood thought of as desirable because of its location or affordability? Have house prices gone up or down over the last 5 to 10 years?

Local economy - Is there a nice combination of business in an area, or does it rely upon just one industry? Have companies moved into or away from an area? Are local businesses hiring? All these play a role.