Dom Fenison works as an LA realtor, and in the following article, provides market trends and home buyer tips for the Los Angeles market.
Los Angeles’ real estate market has long been deemed one of the most exciting by both professionals and home buyers. It’s one of the most competitive in the country, after all. Home to hundreds of celebrities, the area is known for its glitz and glamour that radiates into the real estate market for people to enjoy. However, housing markets are constantly changing as people’s financial states are impacted by the ever-adapting economic trends. And Los Angeles isn’t any different.
As of May 2023, reports show a mixed outlook. The oh-so-desirable location experienced some median sold price fluctuations, but the sales volume figures show an overall upward trajectory. Experts say this could mean LA’s housing demand and supply dynamics are changing.
Dom Fenison Takes a Deep Dive into the Median Sold Price
Real estate professionals use the median sold price of single-family homes as the main indicator of the market’s stability and health. And reports show the area’s price stood at $744,770 in May, representing a 0.8% increase from the month before. However, economists explain it’s quite a fall from last year’s May results — a 6.8% decrease, specifically.
Dom Fenison, delving into LA further, notes that analysts’ results show that the Los Angeles Metro Area witnessed a median sold price of $765,000, boasting a monthly increase (that far exceeds the overall county’s) of 3.4%. Although, a similar reduction can be seen when comparing to 2022. The Metro Area lost 5.0% of its value.
The Los Angeles County sales figures displayed an increase of 20.6% from the previous month, but a decline of 21.8% compared to May 2022. And the Metro Area saw much of the same — a 25% month-to-month increase, yet a sizeable 20.9% decrease compared to last year.
Supply and Demand
Dom Fenison says that experts consider a balanced market to lie within four to six months’ worth of supply. At the moment, the Los Angeles area has roughly 2.2 months’ worth of inventory, running short of the at least four months needed to acquire a balanced status in the eyes of most professionals. As such, the local market will continue forcing upward pressure on house prices.
Forecasting LA’s Real Estate Future
Dom Fenison says that currently classified as a seller’s market, the average listing price of all homes is around $965,000, showcasing a 7.3% increase from 2022. Although, Zillow reports show the Los Angeles-Long Beach-Anaheim region is experiencing a decline of 4.3% in home values from the previous year, standing at $885,564.
The question is: where is the market headed?
Even though the past 12 months have seen declines, experts anticipate a rebound and a positive trajectory for prices in the subsequent year. But as always, investors proceed with caution. Real estate markets are notoriously fickle, changing at the slightest sign of financial movement.
April 2023 saw roughly 42.3% of home sales in LA close above asking, reflecting a competitive market going forward. This is nothing new for the area. Thus, buyers expect to pay more than the listed price to secure their dream homes. Dom Fenison notes that the median sale to list ration supports this at 0.998, suggesting sellers are achieving their set price (or more) with minimal deviations.
Despite this, some analysts expect a market crash in Los Angeles throughout the rest of year and into 2024, before increasing slightly in 2025.
Navigating The Los Angeles Home Market as a Buyer
Whether or not now is the perfect time to snap up an LA home is a conundrum without a definitive answer. Rising mortgage rates are pricing many first-timers out of the market, but those with homes to sell can make fantastic moves in the area’s current housing climate.
However, hiring a local expert is a must-do, even for experienced buyers. These estate agents can guide LA buyers through the fine print, and use their intimate area knowledge to help narrow the search. Plus, they’re a fantastic money saver during negotiations, and will hold their clients’ hands from searches to contracts.
Dom Fenison says that in California, buyers can also participate in commission rebates to save money on their LA purchase. Such rebates let brokers provide their clients with a percentage of the commission fee after the deal closes, giving homeowners up to two thirds of the broker commission.