With California housing markets having decidedly shifted since the summer, the looming question is what comes next. Since 2014, Pacific Union has partnered with John Burns Real Estate Consulting to forecast the market for the upcoming three years. At our November 2017 forecast, we suggested that...
From our company chief economist, Selma Hepp
- August home sales — including single-family residences and condominiums — in greater central Los Angeles took another dip last month, dropping by 13 percent year over year. However, sales of $3 million-plus homes continued to trend than last year, rising by 17 percent.
- Sales trended higher in the Eastside, Sunset East, and the Hollywood Hills.
- The decline was again driven by a large drop in sales across the Valley, greater Pasadena, Beverly Hills, and West of 405.
- Except for sales of homes priced less than $1 million, higher-priced sales trended similar to last year and were above 2016 activity.
- Inventory also declined by 11 percent from last August, a larger drop than seen in the previous four months.
- Compared with last summer, all L.A. neighborhoods except Brentwood and West L.A. had fewer homes for sale.
- An analysis of supply trends by ZIP code shows that the largest increases range from 20 to 30 more homes for sale, including 91602 (North Hollywood), 91405 (Valley Glen) , 90035 (Pico-Robertson), and 90504 (Torrance).
- The largest declines by ZIP code, with 50 to 100 fewer homes for sale, include 91214 (Glendale), 90277 (Redondo Beach), 91604 (North Hollywood), 91364 (Woodland Hills), and 90068 (Hollywood).
- Greater Los Angeles' median home price rose by 7 percent year over year, with an overall year-to-date increase of 10 percent.
- The highest rates of price growth over the last three months were in the Eastside, NELA, Downtown, West L.A., West Side/Central or Mid City, and Eastern Cities.
- Beverly Hills prices picked up speed again.
- Buyers are otherwise not showing a significant change in attitude.
- Overall, the absorption rate remained steady, falling only by less than 1 percentage point, with the difference fairly consistent across price ranges.
- Price reductions remined overall consistent with last year, with less than a 1 percentage point increase, from 19.8 percent to 20.5 percent.
- Demand for homes priced between $2 million and $3 million slowed, with homes staying longer on the market, 50 days overall, up from 42 days last August, driven by the Hollywood Hills, Downtown L.A., and the general Pasadena area.
- Bidding wars remained on par with last year, though buyers are showing less enthusiasm for paying premiums in Sunset East, South L.A., Foothill Communities, West Valley, and Silicon Beach; in other words, areas that previously recorded increased buyer competition are slowing some.
Selma Hepp is the Chief Economist and Vice President of Business Intelligence for Pacific Union International. Her previous positions include Chief Economist at Trulia, senior economist for the California Association of Realtors, and economist and manager of public policy and homeownership at the National Association of Realtors. She holds a Master of Arts in Economics from the State University of New York (SUNY), Buffalo, and a Ph.D. in Urban and Regional Planning and Design from the University of Maryland.
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