Los Angeles Real Estate Market Update - June 2021
The California housing market is showing robust sales gain and record-breaking price as we move into the second month of the spring home buying season.
The imbalance between supply and demand continues to create tough market competition in Los Angeles. Active listings are still going into escrow quickly with a median of 7 days. In the week ending May 15, REALTORS® reported that nearly a quarter of homes sold received ten or more offers. Last month the median price of single family homes in California reached 800K.
After reaching the benchmark 3.00% level in the third week of May, the typical rate for a 30 year fixed-rate mortgage fell back to 2.95% last week. Inventory has been increasing over the last 6 weeks however, if rates increase (which still remains to be seen) this will post further challenges on homebuyers as their purchasing power will begin to decrease.
Skyrocketing lumber prices have prevented a more robust resurgence in new construction activities. However, rates remain low and demand is only increasing as the economy begins to reopen, so new home construction prices are growing by more than 20% on an annual basis.
California’s foreclosure risk improved slightly during the first quarter as the percentage of mortgages that were delinquent dipped for the 3rd consecutive quarter.
The shortage of housing supply, however, will likely remain an issue in the coming months, and that could curtail demand as affordability continues to deteriorate in today’s highly competitive market.
California Association of Realtors/Market Update