Is the Price Right?
For sellers who initially do not price their homes carefully and must reduce down the road, they likely will net less upon closing.
Pricing Too High Can Be Costly
To walk away from closing with the most money, it is crucial to carefully price a home at the outset of coming on the market.
Setting the right initial price is crucial. Data shows that homes without reductions perform better. In Los Angeles County, 81% of homes sold above asking, while reductions of 5% or more resulted in 95.7% sales-tolast list price ratio. In a market with 8% mortgage rates, overpriced homes face reduced interest and lower final sale prices. Starting at a calculated Fair Market Value ensures a better chance of a swift, profitable sale.
Contact me for precise data on Los Angeles price reductions, sales-to-last price ratios, and median days on market in each category.
Active listings
The active listing inventory in the past couple of weeks increased by 286 homes, up 3%, and now sits at 8,964 homes, its highest level since December. It is still the lowest October reading since tracking began in 2012. The inventory has not yet reached a peak, moving past its typical peak between July and August. In September, 32% fewer homes came on the market compared to the 3-year average before COVID (2017 to 2019), 2,461 less. Last year, there were 10,993 homes on the market, 2,029 extra homes, or 23% more. The 3-year average before COVID (2017 to 2019) was 12,890, or 44% more.
Demand
Demand, the number of pending sales over the prior month, decreased by 93 pending sales in the past two weeks, down 3%, and now totals 3,218. Last year, there were 3,376 pending sales, 5% more than today. The 3-year average before COVID (2017 to 2019) was 5,024, or 56% more.
Los Angeles County Housing Summary
- 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, increased from 79 to 84 days in the past couple of weeks. It was 98 days last year, slower than today.
- For homes priced below $750,000, the Expected Market Time increased from 54 to 59 days in the past couple of weeks. This range represents 28% of the active inventory and 40% of demand.
- For homes priced between $750,000 and $1 million, the Expected Market Time increased from 56 to 62 days. This range represents 18% of the active inventory and 24% of demand.
- For homes priced between $1 million and $1.5 million, the Expected Market Time increased from 75 to 79 days. This range represents 17% of the active inventory and 18% of demand.
- For homes priced between $1.5 million and $2 million, the Expected Market Time decreased from 113 to 110 days. This range represents 10% of the active inventory and 8% of demand.
- For homes priced between $2 million and $3 million, the Expected Market Time in the past couple of weeks decreased from 135 to 131 days. For homes priced between $3 million and $4 million, the Expected Market Time decreased from 192 to 177 days. For homes priced between $4 million and $8 million, the Expected Market Time increased from 294 to 329 days. For homes priced above $8 million, the Expected Market Time increased from 1,503 to 1,570 days.
- The luxury end, all homes above $2 million, account for 26% of the inventory and 10% of demand.
- Distressed homes, both short sales and foreclosures combined, made up only 0.5% of all listings and 0.8% of demand. Only 32 foreclosures and 15 short sales are available to purchase today in all of Los Angeles County, 47 total distressed homes on the active market, unchanged in the past two weeks. Last year there were 60 total distressed homes on the market, similar to today.
- There were 3,585 closed residential resales in September, 20% less than September 2022’s 4,508 closed sales. September marked a 17% decline compared to August 2023. The sales-to-list price ratio was 99.9% for all of Los Angeles County. Foreclosures accounted for just 0.5% of all closed sales, and short sales accounted for 0.2%. That means that 99.3% of all sales were good ol’ fashioned sellers with equity.
For the complete Los Angeles County Housing Report please contact me.
