After a several month hiatus, due to the unpredictable market caused by the initial panic from COVID-19, I am happy to announce that the Monthly Market Update is back in action.
Let’s dive in:
Looking at the statistics in front of me I can only think of one word: Fire. Southern California is on fire, and I’m not referring to the wildfires raging across this great state. I am referring to the highly competitive and dynamic housing market of Greater Los Angeles.
If you’re in the real estate industry you know that Los Angeles County is always hot because our demand almost always outpaces our supply (inventory). So it may not come as a surprise when I tell you that our inventory is incredibly low. But it just might shock you to see exactly how low.
Below is a table showing the number of residential properties for sale and sold over the past five years:
|# For Sale||14,626||14,045||12,206||13,374||13,827||
Can you see it? Yep, Year-Over-Year we are down nearly 4,000 listings! If you aren’t shocked yet consider that while we had 4,000 fewer listings on the market we only experienced a decrease of 305 sold listings YoY. If we had seen a proportional decrease in sold listings relative to for-sale listings it would be easy to deduce that the market was softening, but decreasing listings paired with stable closings is indicative of a strong and highly competitive market.
To put this into perspective we’re talking about a decrease in inventory of 27.9% and a decrease in sold listings of only 5.1% – that’s a huge difference!
We’re currently hovering at 1.7 Months of Inventory, which means that if no new listings come on the market within 1.7 months we will have sold out of properties entirely – that’s wild.
If you’re looking for how this impacts the market on a day-to-day basis consider that our average Days on Market for listings is currently 28. That’s the lowest it’s been in the last 10 years – check out the graph below to see Average DOM visualized.
In summation, the market is just as hot as, if not hotter than, the temperature outside lately. The crush in inventory and stable demand is creating an environment in which properties are selling incredibly fast and for top dollar. Record low interest rates will likely sustain if not grow the current levels of demand, which in turn will drive prices even higher. Barring something earth-shaking, this market doesn’t appear to be slowing down any time soon.
See you next month for another edition of the Monthly Market Update!
*All data pulled from the Multiple Listings Service as of 8/21/2020 – criteria: All Residential Property Types + LA County.