thegoodlife
A boutique real estate brokerage servicing LA’s Eastside & beyond
What in the world is going on with the Los Angeles real estate market?! Interest rates have doubled since 2022, pushing affordability down and sending prices tumbling in many areas across the country – yet somehow we’re still in the midst of bidding wars here in LA. What gives?
We can chalk LA’s seemingly bulletproof real estate market up to the simple laws of supply and demand. Reports show a staggering 85% of homeowners with a mortgage are currently locked in to a rate below 5%. Actually its safe to say plenty are locked into the 2-3% range. Why would anyone with a 2.5% mortgage sell their home to purchase a new home at a 6.5% rate, almost doubling their monthly house payment for the same purchase price? Most wouldn’t unless they had to.
Statistically speaking, the city of Los Angeles still hasn’t recovered to pre-pandemic inventory levels. Looking below at the number of new single family homes hitting the market in LA in the past 5 years, we’re actually at record low inventory numbers:
In January 2019 the city of Los Angeles saw 768 new single family homes hit the market while January of this year only saw 167 – that is 78% fewer homes to choose from today than we had in 2019! Statistically speaking for every 1 home coming on the market today there would have been about 5 to choose from in 2019.
What does this mean for sellers? High interest rates or not, its still a great time to sell a home in LA. The few homes coming on the market now tend to skew towards outdated or distressed so it is an especially great time to sell an updated move-in ready home.
What does this mean for buyers? Patience patience patience. People will need to sell at some point. These stats can and will change overnight – stay the course keeping an eye on the market and keeping your pre-approval current – you’ll be educated on the market, confident, and ready to make your move when opportunity strikes.
Curious what your home is worth or what kind of home you can afford? Hit us up, we’d love to chat!
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