Los Angeles Real Estate Data
Los Angeles Housing Data
According to Redfin data in Los Angeles, On average, homes go pending in 53 days and sell for 1% less than the asking price. Well priced properties can go pending in around 26 days and sell for roughly 2% above the list price.
C.A.R. Vice President and Chief Economist Jordan Levine stated, "High inflationary pressures will keep mortgage rates elevated, reducing homebuyers’ purchasing power and depressing housing affordability in the upcoming year. With high borrowing costs in the next 12 months, a pull-back in sales and a downward adjustment in home prices are expected in 2023.”
Levine added, “Home prices will also moderate further over the next several months as interest rates remain elevated in the near term and seasonal factors come into play.”
Despite higher rates and dismal predictions, the Housing market has not seen a slowdown in Los Angeles
The following months' sales activity can be impacted by rising mortgage rates brought on by inflation. The Federal Reserve hiked its federal fund's rate by another quarter-point in March despite the inflation rate slowly declining because it is still too high. Despite a fourth straight week of growth in buy applications, according to the Mortgage Bankers Association's seasonally adjusted buy Index for the week ending March 24, they were still down 35% year over year. For the same period, the MBA's mortgage rates jumped by 1.65 basis points, which has caused many buyers and sellers to stay out of the market. Additionally, low inventory affects sales activity.
ULA Measure-Mansion Tax
Before April 1, 2023, there was an increase in sales for residences and multifamily buildings in Los Angeles valued beyond $5 million. This happened due to Measure ULA, sometimes called "the mansion tax," going into force on 4/1/2023. Voters approved the ballot initiative in November 2022 to fund affordable homes and reduce homelessness. Depending on the sale price, it increases the transfer tax by 4.0% to 5.5%. Due to the recently passed Measure ULA, the city will now charge a substantial transfer fee when selling properties in the luxury real estate market of $5M or over. How this will affect the market, in the long run is still up in the air. Now there is a lawsuit against this measure being unconstitutional.
Los Angeles Housing Market is Still Robust for Well Priced Homes
According to C.A.R.'s Jan 2023 resale housing report, properties are still selling quickly in Los Angeles County. 31 days are the average days on the market. However, sales of existing single-family homes have decreased from the prior year by 38.2 percent. If you're trying to purchase a home in LA, you might still have to spend more than the asking amount.
Inventory is still Low
The current housing market faces an inventory shortage, meaning home prices will likely stay relatively high. However, persistent inflation could lead to a recession shortly. While a recession may not necessarily result in falling home prices, it could bring down mortgage rates, potentially increasing homebuyers' purchasing power.
Bottom Line
Homes that are reasonably priced and situated in desirable regions have a good chance of selling quickly in Los Angeles.