The Greater Los Angeles housing market has had its fair share of challenges in recent months due to various factors such as rising mortgage rates, low inventory, and declining sales. However, industry experts remain optimistic about the future of the market, predicting a turnaround in 2023 and a rebound in 2024.
Norada Real Estate Investments, a real estate investment firm, believes that while Los Angeles home prices may rise, the increase will be at a slower rate. This is in contrast to Los Angeles’ history of being one of the best long-term real estate investments, with high price appreciation. In December 2022, the median home price in Los Angeles County was $799,670, a decrease from $836,630 in November and $826,500 a year ago.
The low housing inventory has been a significant challenge since the 2008 housing crash, where new home construction declined. This issue has not fully recovered and will not do so in 2023, according to Forbes Advisor. This means that buyers will have fewer options and face more competition for available homes. Nevertheless, some experts believe that low inventory will also create more demand and push prices higher.
In January 2023, there were 5,795 homes for sale in Los Angeles, an increase of 11% from December 2022, according to Rocket Homes. The median list price was $989,979, and the average time on the market was 44 days. Despite the challenges, some homes sold for over $1 million between Feb 10 and Feb 22, such as a condo in Marina Del Rey for $1,183,800, according to Redfin.
Although the Los Angeles housing market faces some headwinds, it remains one of the country’s most expensive and desirable markets. It presents opportunities for buyers and sellers willing to negotiate and adapt to changing conditions.
The Los Angeles area is home to many luxury properties, with some of the most expensive homes in the state. This segment of the market has seen the highest growth, increasing by 15.2% over the past two years, driven by wealthy investors and those looking for a second home in the area.
The median home price has risen by 10.1% in the Los Angeles area over the past two years, making it more difficult for first-time homebuyers to enter the market. However, property owners have been able to make a substantial profit from their investments.
Despite these challenges, the Los Angeles housing market has been on a steady rise since the beginning of February, with the median home price increasing by 2.6% since Feb 10th. Moreover, the average home loan interest rate in the area is currently lower than the national average, with 7.01% for a 30-year fixed and 6.26% for a 15-year fixed as of Wednesday, February 22, 2023.
Overall, the Los Angeles housing market is facing some challenges, but there are opportunities for those who are willing to navigate the current conditions. With low inventory and rising prices, both buyers and sellers must be adaptable and negotiate to get the best deal possible. As the market continues to recover, it presents an excellent opportunity for those looking to invest in long-term real estate.
