Los Angeles Real Estate Market Update - April / May 2022
With the Federal Reserve anticipated to take more aggressive steps to fight inflation, interest rates rose further and hit the highest level since late 2018.
HOME PRICES - Despite the mortgage rate increase, the California housing market has remained solid so far this year, and there are signs that point to a decent home-buying season in the upcoming months. The supply situation, for example, should improve in the near term as many potential sellers indicated that they will put their properties up on the market in the next six months.
California existing single-family home sales increased in their median price by 11.9% from a year ago and began to accelerate again as the market prepared to enter the home-buying season. With more and more homes being listed on the market in the next few months, housing costs will likely ease later this year, but may not start leveling off until after the Spring home buying season.Home prices are expected to rise but at a more moderate pace than earlier this year.
SELLERS - Over two-thirds of homeowners who plan to sell in 2022 expect to list in the next six months or by August, according to a new Realtor.com® survey. In fact, nearly half (45.4%) of them plan to put their house up on the market within the next three months. As such, the housing market will hopefully see an increase in the number of for-sale properties as it moves through spring and into summer.
RENTALS - Supply shortage in available rentals has contributed to the prolonged run-up in price growth, while robust home price increases most likely have played a role in the high rent growth as well. So, if you are looking to get into the rental market, now would be a good time.
BUYERS - While sales remained solid in the latest sales and price report, there are signs that imply a market slowdown could be forth coming in the second half of 2022. A quarterly report released by National Association of Home Builders suggests that fewer buyers were trying to find a home to buy in the first quarter of this year
The share of Buyers who plan to give up their home search until next year or later rose for the third straight quarter to 25% in Q122, after bottoming out at 20% in Q221. Higher mortgage rates and double-digit growth in home prices are slowing down the housing demand momentum and the effect may become evident in a couple of months.
- California Association of Realtors (CAR)