Los Angeles Housing Market 2023 Forecast

As the demand for housing in Southern California continues to surge, the real estate market is becoming increasingly challenging. While a balanced market typically comprises four to six months of inventory, the current inventory levels in Los Angeles have fluctuated between 3.01 and 3.81 months since January 2023. This is far from a healthy level, and inventory issues are expected to dictate the future of the real estate market in Los Angeles for years to come.

Who is buying in Los Angeles?

The Los Angeles market is widely regarded as one of the most desirable markets for investors, homeowners, and various industries, including tech companies like Google, which is building a new campus in the city, and popular social media platforms like TikTok. Additionally, Los Angeles is home to numerous film studios and production companies, making it a hub for the entertainment industry. This thriving ecosystem has resulted in high demand for housing, attracting homebuyers from all walks of life. Given these factors, it is clear that the Los Angeles housing market will remain robust and attractive to buyers and investors for the foreseeable future. Overall, the Los Angeles housing market is highly competitive.

Pricing and Accessibility Are Keys To Selling In This Market.

In 2020, the Los Angeles housing market saw a feeding frenzy characterized by a steep drop in months of inventory, bidding wars, and escalating prices, much like the rest of the U.S. housing market. Early in 2023, Los Angeles real estate market began to stabilize a bit, with prices stabilizing, increased supply, and more cautious purchasers preferring freshly refurbished, move-in-ready homes to fixer-uppers.

Decoding the Los Angeles Housing Market: How Inventory Levels are Shaping the Future

The Los Angeles housing market has experienced a drop in median home prices due to higher mortgages. However, with only 2.2 months of inventory left, the housing market is expected to experience upward pressure on home prices in the coming months. In a healthy balanced market, we have 6 months of inventory. The decline in sales may be due to several reasons, including fluctuations in interest rates, buyer preferences, or other economic factors. Overall, the home values in the Los Angeles housing market are predicted to continue to appreciate over the next 12 months, albeit slower than in the past two years, based on the supply-demand dynamics.

Thriving Demand and Upward Pressure: The Key Themes of the Los Angeles Housing Market

While the Los Angeles housing market has experienced some fluctuations and slowdowns, it remains a competitive and sought-after market for buyers and investors.

Priced-well homes are still selling; although we are still receiving multiple offers, the market competition level had decreased compared to the last few years, when buyers were required to waive contingencies from the outset.

Bottomline

Buyers and sellers must stay informed about the latest trends and data to make the best decisions for their needs. Overall, the Los Angeles housing market is expected to stabilize in 2023, making it a good time for buyers to enter. The growing population and a need for more new construction have resulted in an inability to meet the high demand for housing in Los Angeles. As a result, the local real estate market is expected to continue appreciating, making it an excellent city for investors to capitalize on their portfolios.