Los Angeles Homeowners Have Incredible Equity To Leverage Right Now
LA homeowners have built substantial equity. Learn how to calculate yours and use it to make your next move in the Los Angeles market.
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Los Angeles Homeowners Have Incredible Equity To Leverage Right Now?
LA homeowners have built substantial equity. Learn how to calculate yours and use it to make your next move in the Los Angeles market.
What Is Home Equity — and Why Does It Matter Right Now?
In over three decades of helping Los Angeles homeowners buy and sell, I've seen markets shift in every direction. But one constant remains: the long-term power of home equity. Even though home prices have moderated over the last year, many homeowners in LA still hold an incredible amount of equity — and most underestimate just how much.
So what exactly is equity? In the simplest terms, it's the difference between your home's current market value and what you still owe on your mortgage. As the National Association of Realtors (NAR) puts it: "Housing wealth (home equity or net worth) gains are built up through price appreciation and by paying off the mortgage." In a market like Los Angeles — where neighborhoods from Silver Lake to Hancock Park have seen decades of steady appreciation — that equity can be a game-changer.
Los Angeles Homeowners Have Incredible Equity To Leverage Right Now
How Your Equity Can Help You Achieve Your Goals
Whether you've outgrown your current home or you're ready to downsize, the equity you've built over the years can be your most powerful financial tool. It may cover some — or even all — of your down payment on your next property. That's an enormous advantage in today's competitive Los Angeles market.
A recent survey from Realtor.com finds that many homeowners today estimate they've built up a significant amount of equity. And the data backs them up. According to Selma Hepp, Chief Economist for CoreLogic: "While equity gains contracted in late 2022 due to home price declines in some regions, U.S. homeowners on average still have about $270,000 in equity, nearly $90,000 more than they had at the onset of the pandemic."
For LA homeowners — particularly those in established neighborhoods with historic or character homes — the numbers can be even more substantial. If you're considering a move, I always recommend starting with a clear picture of your equity position. Our [seller resources](/sellers-resources) page is a great place to begin understanding what your property may be worth in today's market.
Why a Skilled Real Estate Agent Makes the Difference
Leveraging your equity effectively requires more than a quick online estimate. It takes an experienced agent who knows Los Angeles at the neighborhood level — someone who understands how a 1920s Spanish Colonial in Windsor Square appraises differently than a mid-century modern in the Hollywood Hills.
As Bankrate recently noted: "Hiring a skilled real estate agent can give you a realistic estimate of home prices in your area and how to price your current home. Using that figure, you can calculate how much equity you have and what your net proceeds will look like, so you can apply that money toward the down payment and closing costs of your new home."
Having a solid understanding of your equity is key when making decisions about buying or selling. A skilled agent can help you navigate the often-complicated process — especially in trust and probate transactions where equity calculations can be more nuanced. If you're thinking about your next purchase, our [buyers resources](/buyers-resources) page can help you prepare for every step of the journey.
Key Takeaways
- →Home equity is the difference between your home's market value and what you still owe on your mortgage — and it grows through appreciation and mortgage payments.
- →The average U.S. homeowner holds roughly $270,000 in equity, nearly $90,000 more than at the start of the pandemic.
- →Your equity can cover part or all of a down payment on your next home, giving you significant buying power.
- →Los Angeles homeowners in established neighborhoods may hold even more equity than the national average due to sustained appreciation.
- →A knowledgeable local agent can provide a realistic home valuation so you can calculate your true net proceeds.
Frequently Asked Questions
How do I calculate my home equity?+
Subtract your remaining mortgage balance from your home's current market value. For example, if your LA home is worth $1.2 million and you owe $400,000, you have $800,000 in equity. A professional comparative market analysis from a local agent will give you the most accurate estimate.
Can I use my equity as a down payment on my next home?+
Absolutely. Once you sell your current property, the equity (minus selling costs) becomes your net proceeds. Many Los Angeles homeowners use these funds directly toward the down payment and closing costs on their next home.
Has home equity declined with recent price moderation?+
While some regions saw price dips in late 2022, homeowners on average still hold about $270,000 in equity — significantly more than before the pandemic. In Los Angeles, strong demand and limited inventory have helped preserve equity gains.
Is equity different in probate or trust sales?+
The concept is the same, but the process of accessing and distributing equity can be more complex in probate and trust transactions. Court oversight, multiple beneficiaries, and property condition can all affect net proceeds. Working with an agent experienced in these sales is essential.
Why should I work with a local agent to assess my equity?+
Online estimators often miss the nuances that drive value in Los Angeles — architectural style, lot size, neighborhood micro-trends, and historic designation status. A local agent with deep market knowledge can provide a far more accurate picture of your home's worth and your true equity position.
Wondering how much equity you've built in your Los Angeles home? After 33 years in this market, I can help you get a clear picture of your home's value and a strategy for your next move. Let's connect.
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Ready to buy or sell in Los Angeles? The Barrentine Group has 33+ years navigating the LA market — from probate and trust sales to historic properties in Miracle Mile, Carthay Circle, and the Wilshire corridor.