Los Angeles Real Estate Market Update - October 2020
In Los Angeles (and nationwide), the "For Sale" inventory has been, and still continues to be limited for buyers who are looking for a home and yearn for more choices. There has been a significant decline in inventory compared to last year as national inventory reached a 40-year low and generally, every price range saw new listings diminish over the past few months. The limited amount of properties coming on the market in Los Angeles is extremely pronounced in the price range between $500k and $2M where the demand is extremely high. The San Fernando Valley is particularly in high demand. Professionals who are finding out that they will continue working from home through 2021, are looking to relocate their family to larger homes where they can set up a home-office.
On the other end, land and development deals have drastically slowed down, possibly due to the future uncertainties caused by the Coronavirus's long-term impact.
Even though there is typically a decline in sales at the end of August due to “back to school”, the numbers indicate that the selling season was still strong through September. Desirable homes that were priced accurately were still seeing multiple offers with some homes being sold at over 100K above the asking price!
This is what I saw when I looked in my “crystal ball”….
Predictions are that the buying frenzy will possibly start to plateau over the next few months due to 3 factors:
1) School back in session 2) The typical uncertainty caused by the upcoming Presidential election 3) The holiday season around the corner.
This can be advantageous for buyers who are managing to stay focused and keep their eye on the ball. Especially since the interest rates are so low and that will probably remain low for quite a while, at least until the economy starts recovering from the deep damages caused by Covid-19.
With professional jobs being impacted much less than lower-wage jobs (for now…), more available inventory at the top end and the stock market performing much better than labor markets, the luxury sector continues to drive the Real Estate recovery. And areas like Malibu or Santa Barbara/Montecito are experiencing a very strong demand from east-coast luxury buyers looking to escape the “big city”.
With interest rates remaining near historical lows, the market will hopefully continue its recovery path over the next few months but possibly at slower rates.