It's been a whirlwind of a summer for Los Angeles Real Estate. The first 2 months of the lockdown saw listings and closed sales go down by half on the MLS. Following Governor Newsom's announcement that Real Estate related services were deemed essential combined with dropping mortgage rates to all-time lows, the market started picking up again. Contrary to everyone’s expectations, prices never crashed as a flurry of buyers began to flood the market.
Since many people are now going to be able to work remotely from home indefinitely, families with children need a home-office and are looking to move to the suburbs such as the West Valley (Tarzana, Woodland Hills, West Hills) or to Redondo Beach or Long Beach, where large homes are abundant and public schools are good. Makes sense!
The demand from buyers has pushed prices up in established areas and areas that were once considered up and coming:
Average Price of 3BD Single Family Homes Aug 2019 vs. Aug 2020 - Source Infosparks
Tarzana (Average Price 4BD + HOME $1.635M / 10% increase)
West Hills - (Avg Price $744,801 / 13% increase)
Long Beach - (Avg Price - $839,503 / 15.5% increase)
South Redondo Beach - (Avg Price $1.599M / 40% increase)
Silver Lake / Echo Park (Average price $1.688M / 25% increase)
Highland Park (Average price $1.05M / 14% increase)
Glassel Park (Up and coming area - Average price $946K / 18% increase )
Lake Balboa (Up and coming area - Average price $711K / 13% increase) Data from Infosparks
However, the housing market does have one major challenge that will prevent sales volumes from hitting records: Inventory. The number of homes available for sale is historically low, and after all, buyers can’t purchase what’s not for sale. Even though the volume of new listings overall is higher than last year and last month, historically the volume is still low overall.
In July, existing single family homes were selling in approximately 17 days. That's down from 21 days from last year.
Looking forward, indicators suggest that we will see a market slowdown after a strong August and September. Rates will most likely remain low and demand will remain robust, but Los Angeles needs new listings badly in order to fuel the recovery that we have enjoyed up to this point.
To see a detailed report of home values in your area, please don't hesitate to reach out to us!