Top 3 Trends
As we approach the end of 2024, it’s essential to focus on the emerging trends in the Los Angeles housing market, despite the overwhelming narratives out there.
1. Impact of Mortgage Rates:
The housing market reacts sensitively to mortgage rates. When rates dropped below 6.5% at the end of August, demand surged, with pending sales rising by 9% and the Expected Market Time decreasing from 100 to 92 days. However, as rates climbed back to around 7% in October, market activity slowed again, reflecting the volatility in mortgage costs.
2. Inventory Trends:
The anticipated peak in housing inventory, typically occurring between July and August, has been delayed. As of now, inventory has increased by 15% since July. This year's rising rates have hindered pending sales, causing inventory to accumulate instead of decrease. Expect a peak soon, likely mirroring last year's timing, followed by a drop as the year ends.
3. Buyer-Favorable Conditions:
With the Expected Market Time rising to 97 days, the market has shifted in favor of buyers. An increase in inventory and a slight decline in demand have resulted in longer market times, with many sellers reducing prices. Currently, 32% of active listings have seen price cuts, and the median home price has dropped by about 4.57%.
Despite mixed messages about the housing market, focusing on current data and trends reveals a more buyer-friendly environment than in previous years. Let the statistics guide your expectations.
Los Angeles County Housing Summary
- The active listing inventory in the past couple of weeks increased by 114 homes, up 1%, and now sits at 12,106 homes. In September, 16% fewer homes came on the market compared to the 3-year average before COVID (2017 to 2019), 1,256 less. Yet, 1,175 more sellers came on the market this year compared to September 2023. Last year, there were 8,964 homes on the market, 3,142 fewer homes, or 26% less. The 3-year average before COVID (2017 to 2019) was 12,890, or 6% more.
- Demand, the number of pending sales over the prior month, decreased by 140 pending sales in the past two weeks, down 4%, and now totals 3,757. Last year, there were 3,218 pending sales, 14% fewer. The 3-year average before COVID (2017 to 2019) was 5,024, or 34% more.
- With supply rising and demand falling, the Expected Market Time, the number of days to sell all Los Angeles County listings at the current buying pace, bounced from 92 to 97 days in the past couple of weeks. It was 84 days last year, faster than today. The 3-year average before COVID (2017 to 2019) was 78 days, also faster than today.
- In the past couple of weeks, the Expected Market Time for homes priced below $750,000 increased from 70 to 75 days. This range represents 28% of the active inventory and 35% of demand.
- The Expected Market Time for homes priced between $750,000 and $1 million increased from 68 to 71 days. This range represents 20% of the active inventory and 27% of demand.
- The Expected Market Time for homes priced between $1 million and $1.5 million increased from 87 to 91 days. This range represents 18% of the active inventory and 19% of demand.
- The Expected Market Time for homes priced between $1.5 million and $2 million remained unchanged at 115 days. This range represents 10% of the active inventory and 8% of demand.
- In the past two weeks, the Expected Market Time for homes priced between $2 million and $3 million increased from 160 to 163 days. The Expected Market Time for homes priced between $3 million and $4 million decreased from 224 to 187 days. The Expected Market Time for homes priced between $4 million and $8 million increased from 239 to 315 days. The Expected Market Time for homes priced above $8 million increased from 808 to 1,048 days.
- The luxury end, all homes above $2 million, account for 25% of the inventory and 10% of demand.
- Distressed homes, both short sales and foreclosures combined, made up only 0.7% of all listings and 0.9% of demand. Only 62 foreclosures and 28 short sales are available to purchase today in all of Los Angeles County, with 88 total distressed homes on the active market, down four from two weeks ago. Last year, there were 47 total distressed homes on the market, slightly fewer than today.
- There were 3,747 closed residential resales in September, up 5% compared to September 2023’s 3,585 closed sales, and down 13% from August 2024. The sales-to-list price ratio was 98.8% for all of Los Angeles County. Foreclosures accounted for just 0.4% of all closed sales, and short sales accounted for 0.2%. That means that 99.4% of all sales were good old-fashioned sellers with equity.
Ready to navigate the housing market with confidence?
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