LA Real Estate Market Update - MAY 2021
Bron Realty Group / CAR
News about the economy and the market remain uplifting as the home buying season continues. Supply remained tight in April with inventory dropping below two months again, heating up market competition further before we even enter "Spring/Summer Selling Season". Generally, a balanced market will lie somewhere between four and six months of supply. Inventory is calculated monthly by taking a count of the number of active listings and pending sales on the last day of the month. In other words, if no new listings were to come on the market, it would take 4-6 months to sell everything that is currently for sale. However with the current 1.6 months of supply, it is well short of what economists say is needed for a balanced market.
April 2020 is also the beginning of the period when home sales began to be affected by the lockdown last year. Based upon the first 4 weeks of data, home sales were up by more than 50% compared to last April. Last year at this time, home sales in were cut by half. For example: There were 205 sales of 4 bedroom single family homes in April 2020 versus 467 sales last month in the City of Los Angeles according to the MLS.
Not only did sales and prices rise by double-digits last month, but robust housing demand also drove the market to new records for median days on market last month. The number of days it took for a home to go into escrow (from ACTIVE to PENDING) was just 8 days --- a record low.
After rising sharply at the beginning of Spring, the typical rate for a 30-year fixed-rate mortgage dipped to 2.97% in the third week of April . That is the first-time rates have dipped below 3% in nearly two months.
According to several real estate experts, the home values in Los Angeles will continue to appreciate — the modest forecast hovers around 5% for the next 8-12 months.
Disclaimer: Statistics for sales are always one month behind.