LA County Real Estate Roundup for 2021 & 2022 Forecast
The housing market has had an outstanding year in 2021, with record low-interest rates, the strongest yearly growth in single-family home prices and rentals, historically low foreclosure rates, and the highest number of home sales in 15 years. Homeowners saw a market in which their properties sold rapidly and frequently above the asking prices, as numerous home buyers fought for the winning bid. Mortgage rates at record lows and a lack of available inventory are still sustaining the US housing market's demand.
Southern California home prices rose again in the previous month, though some data point to a slight slowdown in demand. In November 2021, the six-county region's median sales price — the point at which half of the homes sold for more and half sold for less — was $750,000, according to C.A.R.’s recent resale report. This is up 14 percent from a year ago, but unchanged from the median price of the previous month (Oct.2021).
Similarly, the Los Angeles Metro Area posted a decline of -3.2% in sales of existing single-family homes while LA county recorded a YTY sales growth of +1.8% (highest among all the six counties of Southern California).
The apparent slowdown in housing sales and price growth over the previous month is minor, and buyers may simply have an easier time getting offers accepted without having to waive contingencies. The median home price of the Los Angeles metropolitan region in Nov. 2021 was $720,000, 14.3% higher as compared to November 2020.
On the supply side, the number of active listings is still quite low as compared to the housing demand. Housing inventory has decreased considerably across all the counties of Southern California. Condo sales fell in all the counties from the previous year except in San Bernardino and Los Angeles.
Forecast for 2022
The California Association of Realtors (CAR) sees a decline in existing single-family home sales next year and forecast a price rise of 5.2% in 2022. An imbalance in demand and supply will continue to put upward pressure on prices, but higher interest rates and partial normalization of the mix of sales will likely curb median price growth.
The California median home price is forecast to rise to $834,400 in 2022, following a projected 20.3 percent increase to $793,100 in 2021 from $659,400 in 2020. An imbalance in demand and supply will continue to put upward pressure on prices, but higher interest rates and partial normalization of the mix of sales will likely curb median price growth. Additionally, a shift in housing demand to more affordable areas, as the trend of remote working continues, will also keep prices in check and prevent the statewide median price from rising too fast in 2022.
Shortage of supply and an increase in the demand for housing from new homebuyers will push the prices higher over the next twelve months. Mortgage rates will bolster the home buying market and continue pushing up home price growth. There might be a decrease in bidding wars over houses for sale as we move into 2022 but competition for desirable and median price homes will remain. Among Los Angeles real estate trends, limited supply is a critical influence on pricing and negotiating for houses. While new buyers should continue to enter the market, higher interest rates and a less frenzied buying environment might slow down bidding wars.
Interested in what the major Real Estate websites (Redfin, National Association of Realtors, etc..) are saying about 2022? Click Here.
- C.A.R. / NoradaRealEstate.com / FlipSplit.com