2024 Housing Market Predictions for Los Angeles
What are the predictions for the Housing Market in 2024 in Los Angeles?
The Fed’s war on inflation could end soon, but many predict that buyers will still be feeling the squeeze in 2024 in Los Angeles, Santa Monica & Brentwood. “As long as the economy continues to motor along, the new normal of higher rates is here to stay,” says Greg McBride, CFA, chief financial analyst for Bankrate. “A sharp economic slowdown would bring mortgage rates materially lower, but be careful what you wish for. Home price appreciation will be quite modest, at a low- to mid-single digit pace in most areas of the country.”
Here are some housing predictions from the top experts & economists in Real Estate.
Will Housing Inventory Increase?
“There are simply not enough homes for sale,” Yun said in a statement earlier this year.
For inventory levels to improve significantly in Los Angeles, Santa Monica & Brentwood, there would need to be either a surge of homeowners listing their existing properties or a huge amount of new-construction homes hitting the market. While both seem relatively unlikely, Yun does foresees some increase in housing inventory for 2024. “There will be more home construction, and more existing homeowners will be willing to sell and give up their low mortgage rates,” he says.
“Retreating mortgage rates will bring more buyers and sellers to the market and get Americans moving again,” says National Association of Realtors chief economist Lawrence Yun. At a NAR conference in November, Yun predicted that sales will rise by as much as 15 percent next year.
“Housing sales are expected to increase a bit from this year,” says Chen Zhao, who leads the economics team at Redfin. “However,” she qualifies, “we are not expecting sales to increase dramatically, as rates are likely to remain above 6 percent.”
“Lower mortgage rates would help spur home sales activity, which are expected to increase in 2024 compared to 2023,” says Selma Hepp, chief economist at CoreLogic. “Declines in mortgage rates will drive more sellers to trade their existing home and help add much-needed inventory to the market, leading to more transactions.”
Will Prices Go Down?
Probably not, says Yun: “Home prices will rise around 3 to 4 percent,” he predicts.
Prices are intricately connected with housing inventory, as well, notes Zhao. “Sellers are likely to remain reluctant to give up their low interest rate for a much higher one, so inventory will remain constrained,” she says. “As more time passes, more homeowners may be ‘forced’ to sell due to life events, so inventory may rise from the current anemic levels, but it’s unlikely to increase much. That means that prices are unlikely to fall on a year-over-year basis, unless demand falters.”
Will 2024 be a buyer’s or seller’s market?
In today’s local Los Angeles market, tight inventory gives sellers the upper hand. There are more buyers than there are homes available, so each home that comes on the market becomes more of a hot commodity than it might if there were more options to choose from. Without a significant uptick in inventory, the seller’s market seems unlikely to change next year.
“The current significant shortage of inventory suggests it would be hard to [become] a buyer’s market anytime soon,” says Hepp.
“Given expectations about interest rates and supply, demand will probably exceed supply similar to current conditions,” Zhao says. “Supply is likely to remain below what we would deem a balanced market.”
“The plague of low inventory won’t be cured in the short-term, but demand will suffer from high mortgage rates, bringing about more of a balanced market in 2024,” says McBride. “Sellers may find themselves making concessions on closing costs or rate buydowns more often in 2024, and buyers should be wary of biting off more than can be financially chewed.
Bottom line on the 2024 housing market in Los Angeles
The combination of high mortgage rates, steep home prices and low inventory levels are lining up to make the 2024 housing market a challenging one for both buyers and sellers in Los Angeles, Santa Monica and Brentwood. But if rates cool in 2024, as some experts predict, then market activity should heat up in response. The year over year growth of 4.6% increase in housing prices in Los Angeles County suggests that next year is poised to be a slow growth in value for home values but still in a steady upward direction. As the year progresses, even a small increase or decrease in mortgage rates will have a significant impact on demand both for home Buyers and Sellers.
The complexities of the current conditions mean that, now more than ever, it’s smart to lean on the guidance of an experienced real estate agent. If you want to enter the market in 2024, whether as a buyer or a seller, let a pro lead the way for you! Contact us today to get started!
- National Association of Realtors, CoreLogic, Redfin, Norada Real Estate & Bankrate