"LA housing prices are a bubble." Many people say that.

Of course, it is true that housing prices are high. However, there are reasons why housing prices are high that cannot simply be attributed to a bubble.

First, it is very difficult to build new homes in LA. Surrounded by the ocean and mountains, the city center is already densely developed, leaving little land for construction. Moreover, the city's building regulations are very strict. It can take years to obtain permits. This structure naturally blocks supply. With fewer new listings, prices are unlikely to drop easily.

Additionally, interest rates are high these days. With mortgage rates exceeding 7%, not many people are willing to take out loans to buy homes. In the past, many people bought homes with loans for investment purposes, but that demand has significantly decreased now. This actually helps stabilize the market. Speculative forces are retreating, and the market is moving towards actual demand. Therefore, the possibility of a bubble growing like before is low.

Furthermore, LA is not just a major city. It is a city where people from all over the world want to live. It has jobs, weather, culture, food, and entertainment all in one place. Various industries coexist, jobs are consistently maintained, and foreign investors still show interest. The real estate in such a city may experience short-term fluctuations, but in the long run, it has a steady resilience. This is where it is similar yet different from New York or San Francisco.

Looking at the current market, it is not in a state of rapid increase like before. Transaction volumes have decreased, and prices in some areas are slightly adjusting. However, it is not a sharp decline. Rather, it is closer to a breather. If it were truly a bubble, it would have already collapsed significantly. But that is not the case. This indicates that the foundation of the market is still solid.

Of course, this does not mean there are no risks ahead. If interest rates suddenly drop, there is a possibility that investment demand will surge again, leading to overheating, and conversely, if a recession occurs, adjustments may come. However, looking at the current situation, the statement "it's a bubble, it will burst soon" is somewhat exaggerated. The housing prices in LA are not simply the result of speculation but are the result of supply shortages, the city's appeal, and structural realities.

From my experience living here, LA is not a city where one buys homes for short-term profits. It is a city where one holds onto properties for a long time to maintain value. This is because people, money, and opportunities consistently flow here. That is why even though it is expensive, it endures, and that is precisely why it is not a bubble.

In summary, LA real estate is expensive, but it is not a price floating in the air. Supply is limited, demand is steady, and the financial environment suppresses speculation. Therefore, the current housing prices are not simply overheating but are a structural result. Rather than a bubble, it is an expensive market with valid reasons, and that is the Los Angeles real estate market.