35 Years of Los Angeles Housing Appreciation
Market Growth: 1989 to 2024
Over the past 35 years, the Los Angeles real estate market has experienced extraordinary long-term growth. From a median home price of $124,800 in 1989 to $906,000 in 2024, home values have skyrocketed by 626%—more than 7x—driven by economic forces, housing shortages, and strong buyer demand.
This historic appreciation reflects the resilience and strength of LA's real estate market, making it one of the most attractive places for long-term property investment in the U.S.
Housing Market Cycles in Los Angeles
🔄 1. The 1990s Recession & Recovery (1989–1999)
The early 1990s recession hit LA hard. High unemployment, defense sector layoffs, and rising interest rates caused annual home price declines of 3–9% between 1991 and 1996.
However, by the late 1990s, the Los Angeles housing market had begun a steady recovery fueled by economic growth and increasing consumer confidence.
📈 2. The Housing Boom of the Early 2000s (2000–2006)
From 2000 to 2006, Los Angeles saw a 164% price increase—with median values jumping from $221,000 to $585,000. This boom was fueled by:
Low interest rates
Aggressive lending practices
Investor speculation
Annual appreciation often topped 15–20%, but this growth proved unsustainable.
📉 3. The Housing Crash & Subprime Mortgage Crisis (2007–2012)
The 2007 crash was LA real estate's most significant price correction. Home values fell 44%, bottoming out in 2011 at just under $320,000.
Recovery was slow and painful, with millions in equity wiped out. Prices remained flat through 2012, marking a low point for homeowners and investors alike.
🚀 4. Post-Recession Growth (2013–2019)
From 2013 onward, a healthier housing market emerged, with:
Tighter lending standards
Limited inventory
High buyer demand
Home prices grew 5–8% annually, surpassing $600,000 by 2019. Unlike previous cycles, this phase was supported by sound fundamentals.
🦠 5. The COVID-Era Boom (2020–2024)
Surprisingly, the pandemic ushered in one of the strongest real estate markets in recent memory. Between 2020 and 2024, LA home values rose nearly 40%, driven by:
Record-low interest rates
Remote work and demand for space
Supply constraints
Median prices spiked 25% in 2021 alone. Although interest rates cooled by 2023, home values remain well above pre-pandemic levels.
📊 Key Takeaways from 35 Years of Los Angeles Real Estate Data
Long-Term Price Growth: 626% total increase, with a 5.3% compound annual growth rate (CAGR).
Market Resilience: Prices always recovered from downturns, including the 2008 crash.
Post-COVID Upsurge: 2020–2024 saw an unprecedented spike in values.
💡 Real Estate vs. Stock Market: Why Leverage Matters
While the S&P 500 outpaced real estate in raw price appreciation (1,271% vs. 626%), leveraging real estate changes everything.
Thanks to mortgage leverage, a buyer who put 20% down on an LA home in 1989 would've earned a 3,130% return on investment by 2024—compared to 1,271% for stocks.
Real Estate Advantages:
Leverage-driven returns
Rental income
Inflation hedge
Tax benefits
Stock Advantages:
Liquidity
Diversification
Fewer costs and effort
Both asset classes have their place. However, Los Angeles housing has outperformed most markets for long-term, leveraged growth.
📍 Is LA Real Estate Still a Smart Investment?
Yes—Los Angeles remains a top-tier real estate market for long-term growth, wealth building, and lifestyle. With consistent demand, supply constraints, and a strong economy, investing in LA property offers tangible benefits—even in cyclical markets.
💬 Let's Talk About Your Next Move
Whether you're exploring real estate investing in Los Angeles, looking to buy your first home, or just curious about the market, I'm here to help.
📧 Team@AMRE.Group
📞 Let's connect and map out your next move in LA real estate.
