Housing is much different this year compared to last year.
If you've been driving around OC lately, you've probably noticed an increase in FOR-SALE signs and more OPEN HOUSE directional arrows dotting the streets. The housing market is evolving, and with it, the strategies for both buyers and sellers must adapt. Many sellers are approaching the market as if nothing has changed, stretching asking prices and testing the waters. Unfortunately, OVERPRICED homes are becoming more common, leading to longer market times and an increasing number of price reductions. The proliferation of OPEN HOUSE signs underscores this shift, emphasizing the need for a more strategic approach to achieve success.
Attention Sellers:
To navigate this changing landscape, it’s crucial to price your home accurately from the start. Carefully determine the Fair Market Value by scrutinizing the most recent comparable and pending sales. Take into account the condition, location, upgrades, and amenities of your property. Accurate pricing is absolutely crucial. Overzealous sellers who end up needing future price reductions will attract fewer interested buyers, receive fewer offers, and ultimately net less money.
Attention Buyers:
While the market may be slower than it was at the start of the year, it is not a Buyer’s Market with plummeting prices. Homes that are upgraded, nicely appointed, in good condition, and appropriately priced are still selling quickly, often with plenty of activity and multiple offers. However, the longer a home has been on the market, the more willing a seller might be to negotiate.
__________
Active Listings
The active listing inventory in the past couple of weeks increased by 461 homes, up 5%, and now sits at 10,547 homes. In May, 23% fewer homes came on the market compared to the 3-year average before COVID (2017 to 2019), 2,117 less. 1,226 more sellers came on the market this year compared to May 2023. Last year, there were 7,514 homes on the market, 3,033 fewer homes, or 29% less. The 3-year average before COVID (2017 to 2019) was 12,885, or 22% more.
Demand
Demand, the number of pending sales over the prior month, increased by 99 pending sales in the past two weeks, up 2%, and now totals 3,932. Last year, there were 3,833 pending sales, 3% fewer than today. The 3-year average before COVID (2017 to 2019) was 5,789, or 47% more.
Los Angeles County Housing Summary
- With supply rising faster than demand, the Expected Market Time, the number of days to sell all Los Angeles County listings at the current buying pace, increased slightly from 79 to 80 days in the past couple of weeks. It was 59 days last year, hotter than today. The 3-year average before COVID (2017 to 2019) was 67 days, also faster than today.
- In the past couple of weeks, the Expected Market Time for homes priced below $750,000 increased from 56 to 57 days. This range represents 26% of the active inventory and 36% of demand.
- The Expected Market Time for homes priced between $750,000 and $1 million increased from 53 to 58 days. This range represents 18% of the active inventory and 26% of demand.
- The Expected Market Time for homes priced between $1 million and $1.5 million increased from 73 to 75 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 increased from 90 to 92 days. This range represents 10% of the active inventory and 9% of demand.
- In the past two weeks, the Expected Market Time for homes priced between $2 million and $3 million decreased from 148 to 137 days. The Expected Market Time for homes priced between $3 million and $4 million increased from 165 to 199 days. The Expected Market Time for homes priced between $4 million and $8 million decreased from 359 to 330 days. The Expected Market Time for homes priced above $8 million increased from 593 to 907 days.
- The luxury end, all homes above $2 million, account for 28% of the inventory and 10% of demand.
- Distressed homes, both short sales and foreclosures combined, made up only 0.5% of all listings and 0.7% of demand. Only 36 foreclosures and 22 short sales are available to purchase today in all of Los Angeles County, with 58 total distressed homes on the active market, up four from two weeks ago. Last year, there were 46 total distressed homes on the market, similar to today.
- There were 4,394 closed residential resales in May, up 1% compared to May 2023’s 4,355 closed sales, and up 6% from April 2024. The sales-to-list price ratio was 100.0% for all of Los Angeles County. Foreclosures accounted for just 0.5% of all closed sales, and short sales accounted for 0.1%. That means that 99.4% of all sales were good ol’ fashioned sellers with equity.
Ready to navigate the evolving Los Angeles housing market?
Whether you're buying or selling, our team is here to help you achieve your goals.
Contact me today to schedule a consultation and discover how we can assist you in this dynamic market.
