2023 Real Estate Trends

2023 L.A. Area Real Estate Prices, Trends

BY MARCO SANTARELLI

Special to the Business Journal

Are housing prices going down in los angeles?

The market dynamics are changing now. After a two-year housing boom spurred in large part by record-low borrowing costs, the Los Angeles real estate market is now cooling down.

There has been a decrease in house purchases and an increase in the number of homes for sale. Bidding wars have become less prevalent as a result of fewer buyers and more inventory, so buyers may have an easier time bidding around the asking price.

The median price in Los Angeles County peaked in September 2021 and has been on an up-and-down roller coaster since. It fell in July 2022, which was disappointing because it typically climbs from June to July; it even rose from June to July in 2009, when all hell had broken loose, putting this drop in a unique perspective.

In September 2022, the median home price took a small jump of 0.6% from the previous year and 4.3% from the previous month. • Los Angeles County’s median price in September 2022 was $891,770 • Los Angeles County’s median price in August 2022 was $854,960 • Los Angeles County’s median price in September 2021 was $886,050

C.A.R.’s resale report for September shows that at the regional level, sales in all the major regions of California dipped by more than 30% from a year ago. Sales volume also collapsed in Los Angeles County by 31.7%. It shows that • Months Supply of Inventory (SFH) for the Los

Angeles Metro Area is 3.1 months.

things are continuously becoming less hot as compared to the previous year.

The Los Angeles Metro Area posted a decline of -32.4% year-over-year in sales of existing single-family homes. The median home price in the Los Angeles metropolitan region was $750,000, 2.7% higher compared to September 2021, when it was $730,000. However, it was a decline of 2.0% from August’s price of $765,000.

Generally, a balanced market will lie somewhere between four and six months of supply. Inventory is calculated monthly by taking a count of the number of active listings and pending sales on the last day of the month. If an inventory is rising, there is less pressure for home prices to increase. With 3.2 months of supply left, it is still short of what economists say is needed for a balanced market. Hence, the Los Angeles County housing market will continue to see upward pressure on home prices. • Months Supply of Inventory (SFH) for Los Angeles County is now 3.2 months.

Los Angeles Real Estate Market Trends

Los Angeles County home prices are still slightly higher than last year. There are around 218 cities in Los Angeles County where Realtor.com has active listings right now. We have already discussed the supply and demand imbalance in the county and metro area and how the monthly supply of inventory is down to about 13 weeks.

Realtor.com’s September 2022 statistics show that Los Angeles County is a seller’s market, which means that more people are looking to buy than there are homes available.

They take into account two aspects of the housing market. The market demand is measured by unique viewers per property on their website, and the pace of the market is measured by the number of days a listing remains active on their website. • In September 2022, the median list price

of homes in Los Angeles County was $849K, trending up 6.1% yearover-year. • The median listing price per square foot was $566. • The median price of sold homes was $810,000. • The sale-to-List Price

Ratio was 100%, which means that homes in Los

Angeles sold for approximately the asking price on average. • A seller would prefer this ratio to be 100% or more. • On average, homes in Los

Angeles sell after 59 days on the market.

If a region’s housing market is balanced it means that there is enough demand from buyers to equal the supply from sellers. Based on the supply-demand dynamics, the real estate appreciation rate in Los Angeles is predicted to remain slightly skewed on the sellers’ side. The moderate demand but tight inventory should put upward pressure on the prices. Hence, the home values in the Los Angeles housing market will continue to appreciate over the next 12 months albeit at a smaller pace as compared to the past two years.

Some economists forecast that house prices would tumble in 2023, but few, if any, foresee declines comparable to the Great Recession. In large part, this is due to the fact that foreclosures were mostly responsible for the previous significant decreases. Now, financing criteria are much stricter, and experts say that unless they are forced to, many homeowners prefer not to sell for less than their neighbor did a few months ago. 