Scraping the Bottom
The active inventory, buyer demand, and the number of homeowners willing to sell have been bouncing around a bottom all year, so it is only up from here.
Low Readings for a Year Now
Housing is finally at a point where year-over-year statistics will isolate the slightest signs of improvement in the housing market.
The data shows that things have been at their lowest point this year. There aren't many homes for sale, not many people wanting to buy, and fewer homeowners willing to sell. It's like scraping the last of the peanut butter from the jar—it feels almost empty.
Big increases in mortgage rates in late 2022 made fewer people want to buy houses, not many houses were put on the market. Experts think that in 2024, the economy might slow down, causing mortgage rates to drop. When rates go down, more people might want to buy homes, and more homeowners could decide to sell.
Overall, changes might be coming soon. Right now, it's been a slow time for the housing market, but things could pick up if mortgage rates decrease and more people want to buy and sell houses.
Active Listings
The active listing inventory in the past couple of weeks plunged by 493 homes, down 5%, and now sits at 8,560 homes, its lowest level since September. It was also the largest drop of the year. In October, 26% fewer homes came on the market compared to the 3-year average before COVID (2017 to 2019), 1,963 less. Last year, there were 10,257 homes on the market, 1,697 extra homes, or 20% more. The 3-year average before COVID (2017 to 2019) was 11,752, or 37% more.
Demand
Demand, the number of pending sales over the prior month, decreased by 92 pending sales in the past two weeks, down 3%, and now totals 3,009. Last year, there were 3,023 pending sales, nearly identical to today. The 3-year average before COVID (2017 to 2019) was 4,591, or 53% more.
Los Angeles County Housing Summary
- With supply faster than the drop in demand, the Expected Market Time, the number of days to sell all Los Angeles County listings at the current buying pace, decreased from 88 to 85 days in the past couple of weeks. It was 102 days last year, slower than today.
- For homes priced below $750,000, the Expected Market Time increased from 60 to 62 days in the past couple of weeks. This range represents 29% of the active inventory and 39% of demand.
- For homes priced between $750,000 and $1 million, the Expected Market Time decreased from 66 to 59 days. This range represents 18% of the active inventory and 26% of demand.
- For homes priced between $1 million and $1.5 million, the Expected Market Time decreased from 86 to 79 days. This range represents 16% of the active inventory and 17% of demand.
- For homes priced between $1.5 million and $2 million, the Expected Market Time decreased from 106 to 101 days. This range represents 10% of the active inventory and 9% of demand.
- For homes priced between $2 million and $3 million, the Expected Market Time in the past couple of weeks increased from 145 to 153 days. For homes priced between $3 million and $4 million, the Expected Market Time increased from 260 to 320 days. For homes priced between $4 million and $8 million, the Expected Market Time decreased from 385 to 256 days. For homes priced above $8 million, the Expected Market Time decreased from 1,416 to 681 days.
- The luxury end, all homes above $2 million, account for 23% of the inventory and 9% of demand.
- Distressed homes, both short sales and foreclosures combined, made up only 0.8% of all listings and 0.5% of demand. Only 51 foreclosures and 18 short sales are available to purchase today in all of Los Angeles County, 69 total distressed homes on the active market, up 10 in the past two weeks. Last year there were 59 total distressed homes on the market, slightly fewer than today.
- There were 3,636 closed residential resales in October, 4% less than October 2022’s 3,775 closed sales. October marked a 1% increase compared to September 2023. The sales-to-list price ratio was 99.7% for all of Los Angeles County. Foreclosures accounted for just 0.5% of all closed sales, and short sales accounted for 0.4%. That means that 99.1% of all sales were good ol’ fashioned sellers with equity.
Contact me for the complete Los Angeles Housing Report.
