The California housing market remains resilient amidst the challenges posed by high interest rates. In this report, we will delve into the key statistics for September 2023, shedding light on the performance of the housing market in Los Angeles County and across Southern California. In September 2023, the median sold price for existing single-family homes in Los Angeles County stood at $914,640.
This reflects a noticeable increase from the previous month, with a month-to-month change of 3.7%. Compared to the same period last year, prices have risen by 2.6%. However, in terms of sales, there was a 4.5% decrease on a month-to-month basis and a significant 18.3% drop year-to-year.
The overall Southern California region reported a median sold price of $820,000 for existing single-family homes in September 2023. This marks a 1.2% decrease compared to August 2023. Year-over-year, prices have surged by 4.7%. Nevertheless, sales in the region have experienced a 12.4% month-to-month decline and a substantial 21.7% decrease year-to-year.
Are Los Angeles housing prices dropping?
Now, to address this question: It’s important to note that while there was a month-to-month increase in median home prices in Los Angeles County, there was a decrease in sales. In Southern California, prices declined slightly compared to the previous month, but year-over-year, they have risen.
The market is displaying some fluctuations, but whether this is indicative of a long-term trend remains to be seen. It’s essential to consider these statistics in the broader context of the housing market’s overall performance.
Los Angeles Housing Supply Data
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 2.7 months of supply left, it is still short of what economists say is needed for a balanced market. Hence, the Los Angeles County housin market will continue to see upward pressure on home prices.
- Months Supply of Inventory (SFH) for Los Angeles County is now 2.7 months.
- Months Supply of Inventory (SFH) for the Los Angeles Metro Area is 2.8 months.
- Months Supply of Inventory (SFH) for Southern California is 2.8 months.
Market Forecast
Looking ahead, the market is projected to maintain its upward trajectory in terms of prices, albeit at a slightly moderated pace. Factors such as economic stability, government policies, and interest rates will significantly influence this trajectory. It is important for buyers and sellers to closely monitor these factors and adjust their strategies accordingly.
Considering the competitive nature of the market, buyers should act judiciously and be prepared for potential bidding wars. Additionally, it is advisable for sellers to price their properties competitively to attract potential buyers.
Is it a Good Time to Buy in Los Angeles?
The question of whether it’s a good time to buy in Los Angeles depends on various factors, including your financial situation, long-term goals, and risk tolerance. While prices are on the rise, they may continue to appreciate, making a purchase a potentially valuable investment. However, considering the competitive nature of the market, buyers should conduct thorough research, be financially prepared, and consider consulting with real estate professionals for guidance.
Hence, the Los Angeles housing market showcases consistent price growth, indicating a robust demand for housing in the region. However, buyers and sellers should remain informed about market dynamics and exercise caution in their real estate transactions.
Is Los Angeles a Seller’s Real Estate Market?
The following Los Angeles housing market trends are based on single-family, condo, and townhome properties listed for sale on realtor.com. Land, multi-unit, and other property types are excluded. This data is provided as an informational resource only.
When it comes to the real estate market, one crucial factor to consider is whether it favors sellers or buyers. A seller’s market indicates that there is more demand from buyers than the available supply of homes. Let’s explore whether Los Angeles County, CA qualifies as a seller’s real estate market based on data for Aug 2023.
Market Prices and Trends
In August 2023, the median listing home price in Los Angeles County stood at $987.5K, showcasing a significant 11.2% year-over-year increase. The median listing home price per square foot was $629, indicating the price efficiency in the market.
Moreover, the median home sold price was $860K, emphasizing a strong pricing trend in the county.
Sale-to-List Price Ratio
The sale-to-list price ratio is a crucial indicator of market competitiveness. In August 2023, homes in Los Angeles County, CA, were sold for approximately 100.05% of the asking price on average. This high ratio suggests a market where sellers have the upper hand.
Days on Market
On average, homes in Los Angeles County remained on the market for 42 days before being sold. Although this figure indicates a reasonable pace of sales, it’s important to note that the trend for median days on the market has slightly increased since the previous month.
Market Dynamics
The data strongly suggests that Los Angeles County, CA is a seller’s market in August 2023. The demand for homes outweighs the available supply, resulting in a situation where sellers have the advantage. This is reflected in the sale-to-list price ratio, where homes are fetching close to their asking prices.
Interestingly, Los Angeles County comprises 218 cities with varying median listing home prices. The range, from the most affordable city, Hi Vista, with a median listing home price of $422.5K, to the most expensive city, Beverly Hills, with a median listing home price of $6.6M, underlines the diverse housing landscape within the county.
In conclusion, prospective buyers in Los Angeles County need to be prepared for a competitive market. Strategic decisions, expert guidance, and financial readiness are key components to navigate this seller’s real estate market effectively.
Is Rent Going Down in Los Angeles?
The latest Zumper Los Angeles Metro Area Rent Report provides valuable insights into the rental market across metro cities in the region. This report highlights the most and least expensive cities for one-bedroom rentals, as well as cities with the fastest-growing rents. In addition, it offers a glimpse into the California one-bedroom median rent for the previous month, which was $2,063.
The Most Expensive Cities for One-Bedroom Rentals
When it comes to the most expensive cities in the Los Angeles Metro Area for one-bedroom rentals, the following cities top the list:
Beverly Hills: Beverly Hills takes the crown as the most expensive city, with one-bedroom rentals priced at a substantial $3,160.
Santa Monica: Following closely, Santa Monica ranks as the second priciest city, with an average rent of $3,140 for one-bedroom apartments.
Newport Beach: Newport Beach secures the third position in terms of expense, with one-bedroom rentals averaging $3,120.
The Least Expensive Cities for One-Bedroom Rentals
Conversely, if you’re seeking more budget-friendly rental options, consider the following cities:
Yucca Valley: Yucca Valley emerges as the most affordable city, with one-bedroom rentals priced at an inviting $1,020.
San Bernardino: San Bernardino is the second least expensive option, with an average rent of $1,400 for one-bedroom apartments.
Hawthorne: Hawthorne takes the third spot in the least expensive cities list, with one-bedroom rentals averaging $1,750.
The Fastest Growing Rents
For those interested in the rental market’s growth rates, here are the cities with the fastest-growing rents, both year-over-year (Y/Y%) and month-to-month (M/M%):
Year-Over-Year Growth (Y/Y%):
Torrance: Torrance stands out with the fastest-growing rent, showing an impressive 14.8% increase since the previous year.
Orange: Orange takes the second spot, with rent climbing by 12.8% year-over-year.
Santa Monica: Santa Monica is the third city with notable rent growth, recording a 10.6% increase compared to the previous year.
Month-Over-Month Growth (M/M%):
Glendale: Glendale leads in monthly rental growth, with a 5.9% increase.
Torrance: Torrance secures the second spot in terms of monthly growth, with a 3.9% increase in rent.
Newport Beach: Newport Beach takes the third position in monthly growth, with rent climbing by 3.7%.
Los Angeles Housing Market Forecast 2023-2024
Let us look at the price growth recorded by Zillow, a leading real estate marketplace. The Los Angeles housing market has long been a topic of interest due to its dynamic nature and diverse neighborhoods. For those keen on understanding the trajectory of the Los Angeles housing market, Zillow provides valuable insights based on comprehensive data analysis. Let’s explore the current situation and the forecasted outlook for the housing market in Los Angeles.
Current Market Snapshot
As of August 31, 2023, the average home value in the Los Angeles-Long Beach-Anaheim area stands at $891,328. Over the past year, there has been a slight dip of 1.4% in home values. Homes in this region typically go to pending in around 13 days, indicating a relatively fast-paced market.
Market Forecast
Looking ahead, Zillow’s 1-year market forecast predicts a 4.0% increase in home values by August 31, 2024. This forecast suggests a positive trajectory, anticipating a rebound from the recent dip in home values.
Sale Dynamics
Examining sale dynamics, the median sale to list ratio as of July 31, 2023, was 1.006, indicating that homes were typically sold slightly above the listed prices. Additionally, a significant 57.2% of sales were transacted over the list price, illustrating the competitive nature of the housing market.
Time on Market
The median days to pending, as of August 31, 2023, was 13 days. This indicates that homes are moving swiftly, underlining the demand in the market and the willingness of buyers to act promptly.
Market Outlook: Are House Prices Going Up?
Considering the 1-year market forecast, which predicts a 4.0% increase in home values, the housing market in Los Angeles is showing signs of recovery and growth. While there has been a slight dip in home values over the past year, the forecast suggests a positive shift in the coming year, with prices expected to rise. This anticipated rise in home values points towards a favorable outlook for prospective sellers and a potentially competitive market for buyers.
In summary, the housing market in Los Angeles is poised for growth, and the current forecast indicates an upward trend in home values. Prospective buyers and sellers should stay informed and work closely with real estate professionals to make informed decisions in this evolving market.
Is Los Angeles Housing Market Going to Crash?
Some of housing analysts say that home prices in Los Angeles and Orange counties will fall by the middle single digits in 2023, while home prices in the Inland Empire will fall by the high single digits over the same time period. They anticipate that prices will continue to fall on a regional and national scale in 2024 but at a considerably slower rate, followed by a little increase in 2025.
Do buyers have any advantage? Is it the right time to buy a house in Los Angles? This is a never-ending question with no definitive answer. Buyers believe it is not a very good time to buy a home in Los Angeles due to rising mortgage rates and home prices. On the other hand, it is a good time to sell so you can expect more inventory due to increasing seller optimism.
More houses are expected to be listed in the coming months which may bring down the pace of appreciation to some extent. Affordability is a big issue in Los Angeles County as nearly three in four residents can’t afford to buy a median-priced home in the area. According to HousingWire, an index that combined median income and median home prices made Los Angeles the least affordable city in the country, and several younger residents said they were concerned they will never be able to afford a house. Home shoppers are leaving Los Angeles for cheaper metros, the most popular being Las Vegas.
Is Real Estate a Good Investment in Los Angeles?
Investing in real estate in Los Angeles for the long term can be an attractive option, but it’s essential to carefully evaluate the market and consider several factors before making such a significant financial commitment.
Los Angeles has historically been a sought-after real estate market due to its desirable location, diverse economy, and strong demand for housing. Here are some key points to consider:
Market Stability
Los Angeles has a relatively stable real estate market with a history of consistent, long-term appreciation in property values. This stability is driven by factors such as the city’s status as an economic hub, its thriving job market, and the limited supply of land for new construction. However, it’s essential to note that like any market, there can be fluctuations, and past performance is not indicative of future results.
Property Appreciation
Over the long term, Los Angeles properties have typically appreciated in value. While there can be short-term fluctuations, investing with a long-term perspective can allow you to benefit from the city’s overall property value growth.
Rental Income Potential
Los Angeles has a strong rental market, with a high demand for both single-family and multi-family rentals. This presents an opportunity for investors to generate rental income. However, rental income potential can vary depending on the neighborhood and property type.
Consideration for Property Type
Investors in Los Angeles can choose between single-family and multi-family properties. Single-family homes often provide more predictable rental income and potential for appreciation, while multi-family properties can offer multiple income streams but come with added management responsibilities.
The Housing Shortage Dilemma
Los Angeles is no stranger to the housing shortage dilemma. As its population continues to grow, driven by a robust job market and desirable lifestyle, the housing market struggles to keep pace. The consequences are multifold, affecting both renters and potential homeowners. High demand has led to escalating rental costs and home prices, making housing less affordable for many.
Investor’s Paradise: The Demand-Supply Gap
For real estate investors, this gap between demand and supply represents a significant opportunity. The housing shortage has created a strong demand for rental properties, offering the potential for attractive rental income and return on investment. Here’s why Los Angeles is an investor’s paradise:
- Rental Income: High demand for housing has driven up rental rates, providing investors with the prospect of steady rental income.
- Property Appreciation: Despite the challenges, Los Angeles properties have shown a history of appreciating in value over the long term.
- Population Growth: Los Angeles continues to attract new residents due to its economic opportunities and lifestyle. This demographic growth fuels the demand for housing.
- Construction Gap: Construction in Los Angeles hasn’t kept pace with population growth, intensifying the supply-demand imbalance.
Economic Diversity
Los Angeles is renowned for its economic diversity. The region’s economy spans various sectors, including entertainment, technology, aerospace, healthcare, and tourism. The presence of major corporations, such as those in the entertainment and tech industries, has been a key driver of job creation and economic growth. The city’s thriving tourism industry, centered around attractions like Hollywood and Disneyland, also plays a significant role in generating revenue and job opportunities.
Job Growth
Los Angeles has consistently experienced job growth, making it an attractive destination for job seekers. The city’s diverse economic landscape provides opportunities in various fields. It is a hub for creative industries, with Hollywood serving as the epicenter of the global entertainment industry. Additionally, the tech sector has witnessed substantial growth in Silicon Beach, an area on the west side of Los Angeles, home to numerous tech startups and established companies.
The presence of educational institutions, including the University of California, Los Angeles (UCLA) and the California State University, Northridge, contributes to research, development, and a well-educated workforce. The healthcare sector, with renowned institutions like the Cedars-Sinai Medical Center, further drives job opportunities.
Population Growth
The Los Angeles Metropolitan Area’s strong economy and job market have attracted a steady influx of residents. The allure of the city’s lifestyle, cultural diversity, and range of amenities has made it a magnet for people from various backgrounds. The region’s population growth can be attributed to factors such as:
- Job Opportunities: People move to Los Angeles in search of better job prospects and career growth.
- Education: The presence of top-tier universities and educational institutions attracts students and faculty from around the world.
- Cultural Attractions: The city’s vibrant cultural scene, including theaters, museums, and art galleries, appeals to those seeking a rich cultural experience.
- Quality of Life: Los Angeles offers a pleasant climate, beautiful landscapes, and recreational opportunities that enhance the quality of life.
- Entertainment Industry: The allure of the entertainment industry draws aspiring actors, musicians, and filmmakers to Los Angeles.
As the population continues to grow, the demand for housing and services surges, creating a dynamic environment for real estate investors.
How to Invest in Real Estate in Los Angeles?
Investing in real estate in Los Angeles involves several steps:
1. Research the Market: Begin by thoroughly researching the Los Angeles real estate market. Analyze historical property values, rental trends, and the performance of different neighborhoods.
2. Financial Preparation: Ensure your financial situation is in order. This may include saving for a down payment, understanding your credit score, and securing financing.
3. Property Selection: Choose the type of property you want to invest in, whether it’s a single-family home, multi-family building, or another type. Consider your investment goals and budget.
4. Location Matters: Location is critical in Los Angeles. Research neighborhoods and select areas with potential for growth and strong rental demand.
5. Property Management: Decide whether you’ll manage the property yourself or hire a property management company. This choice may depend on the number of units and your experience.
6. Legal and Tax Considerations: Understand the legal and tax implications of real estate investing in Los Angeles. Consult with professionals if needed.
Single-Family Rental vs. Multi-Family Investment
When considering whether to invest in single-family or multi-family properties, it’s essential to weigh the pros and cons of each:
Single-Family Rental:
- Typically lower initial investment.
- Easier property management.
- Predictable rental income.
Multi-Family Investment:
- Multiple income streams.
- Potential for higher overall rental income.
- More management responsibilities.
The choice between the two depends on your investment goals, budget, and willingness to manage the property. Both can be viable options in the Los Angeles market.
Maximizing Return on Investment
Investors looking to maximize their return on investment (ROI) in Los Angeles should consider the following strategies:
- Location Selection: Carefully choose neighborhoods with strong rental demand and potential for property appreciation.
- Property Type: Evaluate whether single-family or multi-family properties align with your investment goals and budget.
- Property Management: Efficient property management can enhance ROI by reducing vacancies and maintenance costs.
- Market Timing: Keep an eye on market trends and consider timing your investment to take advantage of favorable conditions.
- Legal and Tax Considerations: Consult with legal and financial experts to ensure you’re optimizing your investment from a legal and tax perspective.
References:
- https://www.car.org/marketdata/data/countysalesactivity
- https://www.zillow.com/losangeles-ca/home-values
- https://www.zumper.com/blog/los-angeles-metro-report/
- https://www.realtor.com/realestateandhomes-search/Los-Angeles_CA/overview