Los Angeles Housing Market Forecast

Los Angeles Housing Market

It’s good times for home sellers in Los Angeles County where prices just keep rising. And homes are selling fast. The average home price in LA County hit $680,000, which was up $125,000 vs 12 months ago. That’s the second-highest year-over-year gain.

Unfortunately, LA is now considered the least affordable place to buy a home.  While we believed an exodus from California continues, a new study from the University of California says it’s not so much.  If people are staying, then it will support more demand for homes. Those arriving will find home prices are steep.

And 80% of homes sold in LA County were above asking price. Sales last month totaled 27,012, the most for any month since August 2006.   June’s total sales were up 52% from a year ago.

Single family homes in Los Angeles County rose 9.7% to $796,120 and that is up 28.5% from 12 months ago during the pandemic shutdown.  One third of the homes sold in June were over $1 million, vs 18% June of 2021. See the list of most affordable neighborhoods and where the fastest rising prices are below.

Year to date home sales and prices well up vs 2020 across Southern California.

June housing market snapshot.
June housing market snapshot. Screenshot courtesy of CAR.

Sales in June rose 8.5% and as the economy finally does reawaken.  Some of the demand will push forward into fall and mortgage rates are not expected to rise to slow that down. Immigration is likely to add upward pressure once they begin arriving.  The price of a condo in LA county fell by $1,000 from May however sales picked up 6.5% from last month.  Buyers priced out of the housing market will turn to the condo market to avoid homelessness or moving far away to find another home or a rental.

In Riverside, single detached homes rose $15,000 in price from May and in Orange County they rose $38,000, while in San Bernardino house grew by $25,000.

The new Covid 19 scare is serious and likely to discourage buyers to some extent. As prices rise, the market becomes unaffordable to more buyers, particularly first time buyers who need larger down payments.  Those buyers wanting mortgages with only 5% down will need an annual income of $131,105 and on a 10% down payment, the yearly income required to qualify is now $124,205.

For buyers, the good news is that showings are decreasing and listings are rising a little.

Here are the visuals from CAR for the month of June:

Single family home prices in Southern California:

Southern California housing markets in June.
Southern California housing markets in June. Screenshot courtesy of CAR.

Southern California Condo prices during June:

Southern California condo prices
Condo sales and prices in June. Screenshot courtesy of CAR.

Sales price to listing price rises by 104%.

Sales price to listing price ratio in So Cal.
Sales price to listing price ratio in So Cal. Screenshot courtesy of CAR.

Sales not as brisk as May but is still up 34% over last June 2020.

Year over year Sales comparison. Southern California.
Year over year Sales comparison. Southern California. Screenshot courtesy of CAR.
Los Angeles City housing snapshot in June.
Los Angeles City housing snapshot in June. Screenshot courtesy of CAR.
Los Angeles City competitiveness report for June.
Los Angeles City competitiveness report for June. Screenshot courtesy of CAR.

Zillow Los Angeles Home Price Forecast

Zillow estimates the average house price in Los Angeles is now at $1.14 million.  Average value for all home types rose 16.7% year over year.

Los Angeles home prices.
Los Angeles home prices. Screenshot courtesy of Zillow.

Los Angeles Housing Market – Redfin

LA housing market trends.
LA housing market trends. Screenshot courtesy of Redfin.

Los Angeles County Prices In April 2021

FirstTeam’s latest report shows listings are down, days on market are down and median prices are rising.

June monthly housing sales/price report.
June monthly housing sales/price report. Screenshot courtesy of First Team Realty Los Angeles California.

City of Los Angeles Housing Market Update

First Team Real estate has a beautiful report on each Los Angeles community. See it at: firstteam.com/los-angeles-county-real-estate-market-update/

June monthly housing sales/price report for the City of Los Angeles
June monthly housing sales/price report for the City of Los Angeles. Screenshot courtesy of First Team Realty Los Angeles California.

Hot Topic for 2021/2022
Are LA Home prices about to rocket, and is this a bad time to be buying?
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Buyers will want to learn more about the full US real estate forecast and what is driving the overall California housing market and the markets in San Diego, San Francisco, San Jose and Sacramento.

Why Will Home Prices Rise Strongly?

The end of the Covid 19 threat will see some high-density renters and buyers return to metro LA however fast rising prices will make that a challenge except for the most wealthy.  Restaurants, beaches, hotels, tourism, and small businesses will reopen.   Some will reopen after bankruptcies.

The biggest factor for home prices is NIMBYism and the high cost of building (materials and labor). Even with the low likelihood of acquiring land, getting building permits, developers will find housing labor, gasoline and materials prices climbing faster.  NIMBY’s and anti-development regulations will stunt new home building. With a limited supply, prices can only rocket across Los Angeles.  And taxes must be paid, and they will be passed onto the buyers.

The exodus may actually be helping to keep LA home prices under control.  Home sellers want to know where the market is going in the next 3 months to 6 months. That depends on the economic restart and Fed stimulus aid payments.

Screenshot courtesy of Realtor.com

Los Angeles Neighborhoods with the largest price growth last 6 years.

Chart data courtesy of Zillow Data.

City / Community 2021 2020 2019 2018 2017 2016
Price Growth Rate in 6 years
Beverly Hills $2,767,744 $2,751,379 $2,481,355 $2,226,040 $1,809,546 $1,467,303 87.51%
Los Angeles (Hancock Park, Western Wilton, Wilshire Center, Windsor Square) $3,392,654 $3,353,369 $3,001,153 $2,751,014 $2,304,153 $1,941,716 72.70%
Los Angeles (Griffith Park, Hollywood, Los Feliz) $1,789,835 $1,799,966 $1,627,317 $1,441,524 $1,254,727 $1,060,173 69.78%
South Pasadena $1,424,520 $1,401,505 $1,324,345 $1,192,196 $1,022,549 $844,472 65.96%
Los Angeles (Hancock Park, Rampart Village, Virgil Village, Wilshire Center, Windsor Square) $1,674,475 $1,647,379 $1,525,317 $1,374,918 $1,165,817 $998,535 64.98%
San Marino $2,430,196 $2,440,079 $2,312,175 $2,027,963 $1,794,724 $1,510,160 61.58%
Beverly Hills $3,476,019 $3,448,545 $3,126,124 $2,870,630 $2,518,880 $2,159,817 59.67%
Manhattan Beach $2,806,205 $2,779,714 $2,573,088 $2,372,951 $2,033,939 $1,757,877 58.13%
Los Angeles (Echo Park, Silver Lake) $1,079,809 $1,063,800 $978,960 $901,793 $786,279 $673,080 58.05%
Pasadena $1,616,788 $1,586,439 $1,466,929 $1,323,027 $1,165,616 $1,011,096 56.90%
Los Angeles (Hollywood, Melrose), West Hollywood $2,943,258 $2,918,909 $2,676,707 $2,496,861 $2,205,852 $1,868,378 56.23%
Lake Los Angeles, Palmdale $269,059 $264,688 $237,484 $225,829 $197,917 $169,760 55.92%
Los Angeles (Mt Olympus) / West Hollywood $2,008,581 $1,978,031 $1,827,662 $1,683,634 $1,484,399 $1,270,805 55.65%
Los Angeles (Downtown Fashion District, Downtown Southeast) $782,726 $778,011 $701,469 $678,139 $612,786 $500,109 55.57%
Santa Monica $2,488,035 $2,481,003 $2,319,398 $2,153,253 $1,864,420 $1,596,428 55.41%
Hermosa Beach $2,240,234 $2,196,627 $1,990,961 $1,854,260 $1,645,051 $1,420,624 54.62%
Los Angeles (Hollywood) $1,745,080 $1,734,346 $1,579,213 $1,458,927 $1,320,925 $1,127,987 53.76%
La Cañada Flintridge $1,867,527 $1,843,804 $1,686,791 $1,565,123 $1,401,311 $1,210,087 52.37%
Los Angeles (Cheviot Hills, Rancho Park) $1,942,180 $1,940,244 $1,838,646 $1,706,658 $1,498,016 $1,291,058 50.28%
Los Angeles (Hancock Park, Koreatown, Wilshire Center, Wilshire Park, Windsor Square) $1,624,199 $1,615,512 $1,565,228 $1,419,468 $1,217,691 $1,079,947 49.59%
Los Angeles (North Hollywood, Studio City) $1,779,373 $1,749,915 $1,595,400 $1,488,666 $1,317,866 $1,174,030 49.05%
Inglewood $650,853 $638,693 $560,395 $533,917 $490,879 $428,632 49.01%
Los Angeles (Mid-City West), West Hollywood $2,300,154 $2,303,261 $2,146,959 $1,951,034 $1,720,256 $1,551,813 48.42%
Ladera Heights $1,544,757 $1,522,463 $1,370,472 $1,323,829 $1,165,639 $1,029,890 47.83%
Los Angeles (Westwood) $2,874,093 $2,868,275 $2,711,469 $2,497,602 $2,226,835 $1,946,790 47.33%
Los Angeles (West Fairfax) $1,938,043 $1,946,512 $1,837,649 $1,664,422 $1,533,924 $1,321,328 47.31%
Lancaster $310,808 $302,114 $266,880 $256,971 $233,052 $205,366 47.11%
Los Angeles (Arlington Heights, Country Club Park, Mid-City) $1,274,433 $1,266,422 $1,167,833 $1,098,797 $949,063 $860,982 47.09%
Los Angeles (Mid-City, West Adams) $962,917 $947,339 $871,964 $807,928 $734,988 $644,328 47.03%
Los Angeles (Southeast Los Angeles, University Park) $866,289 $861,918 $763,956 $740,472 $680,524 $587,607 46.68%
Beverly Hills $6,137,833 $6,079,687 $5,611,769 $5,230,676 $4,763,676 $4,175,741 45.60%
Inglewood, Lennox $641,211 $632,178 $556,444 $533,797 $489,805 $434,265 45.57%
Santa Monica $4,621,647 $4,551,562 $4,352,830 $3,989,826 $3,642,068 $3,128,069 45.51%
Hi Vista, Lake Los Angeles, Lancaster, Roosevelt Corner, Wilsona Gardens $320,197 $311,474 $275,316 $266,074 $243,276 $214,542 45.18%
Los Angeles (South Los Angeles) $669,954 $656,609 $605,798 $599,516 $521,049 $453,440 44.81%
Los Angeles (Fairfax, Melrose, Miracle Mile, Park La Brea, Wilshire-La Brea) $1,988,067 $1,981,943 $1,920,523 $1,778,609 $1,520,494 $1,369,137 44.76%
Los Angeles (South Los Angeles) $609,135 $598,670 $533,030 $507,970 $470,403 $415,236 44.18%
Los Angeles (Atwater Village, Elysian Valley, Silver Lake) $1,146,172 $1,141,785 $1,054,739 $971,432 $839,833 $793,981 43.81%
Inglewood $735,715 $722,701 $647,272 $633,405 $569,125 $503,607 43.50%
Los Angeles (Southeast Los Angeles) $511,350 $508,486 $446,513 $428,095 $391,070 $354,733 43.34%
Los Angeles (South Los Angeles) $578,258 $575,269 $520,089 $493,772 $445,766 $401,395 43.32%
Inglewood $697,038 $682,941 $591,622 $575,511 $544,939 $476,630 43.29%
Los Angeles (Hyde Park, View Park, Windsor Hills) $832,799 $808,470 $715,635 $681,438 $635,657 $564,693 43.17%
Los Angeles (Downtown Civic Center, Chinatown, Arts District, Bunker Hill, Historic Core, Little Tokyo) $782,253 $789,962 $719,563 $668,410 $658,804 $551,842 43.15%
Inglewood $753,810 $728,699 $643,870 $636,901 $591,598 $509,946 42.90%
Los Angeles (Southeast Los Angeles), Vernon $477,569 $475,712 $414,909 $398,650 $368,617 $333,305 42.73%
Athens, Los Angeles (South Los Angeles) $544,045 $536,721 $471,049 $447,106 $417,865 $376,087 42.71%
Compton, Rancho Dominguez $502,674 $494,895 $434,829 $420,140 $392,974 $349,162 41.74%
Compton, Rosewood, Willowbrook $477,805 $469,491 $414,375 $399,815 $372,295 $331,644 41.56%
Los Angeles (South Los Angeles, Southeast Los Angeles) $488,763 $478,231 $431,734 $405,352 $372,511 $338,314 41.36%
Los Angeles (East Hollywood) $1,142,605 $1,115,744 $1,010,551 $952,212 $879,589 $789,309 41.36%
Los Angeles (Southeast Los Angeles, Watts), Willowbrook $474,518 $465,043 $418,652 $395,814 $367,349 $329,124 41.30%
Los Angeles (Southeast Los Angeles, Watts) $466,527 $453,234 $411,880 $386,309 $355,889 $320,960 41.21%
Culver City $1,675,237 $1,652,962 $1,515,531 $1,470,515 $1,341,791 $1,172,642 40.96%
Juniper Hills, Littlerock, Sun Village $344,200 $336,301 $293,317 $287,302 $268,295 $238,775 40.84%
Lake Los Angeles, Palmdale $340,122 $331,530 $295,350 $284,583 $264,294 $235,764 40.62%
Los Angeles (South Los Angeles) $503,487 $497,282 $448,227 $423,108 $393,116 $354,285 40.36%
Los Angeles (Sawtelle, West Los Angeles) $1,697,468 $1,693,882 $1,620,634 $1,512,820 $1,408,513 $1,208,465 40.17%
Los Angeles (Bel Air Estates, Brentwood) $3,508,077 $3,473,727 $3,251,603 $3,064,846 $2,807,256 $2,481,562 39.98%
Los Angeles (Bel Air Estates, Beverly Glen) $3,171,568 $3,149,334 $2,937,492 $2,776,477 $2,556,405 $2,251,908 39.85%
Los Angeles (Lincoln Heights, Montecito Heights) $755,500 $750,457 $689,291 $669,829 $637,680 $537,181 39.70%
Los Angeles (Baldwin Hills, Crenshaw, Leimert Park) $1,052,206 $1,034,410 $955,196 $879,347 $823,510 $740,983 39.60%
Los Angeles (North Hollywood) $727,821 $716,374 $623,986 $606,508 $566,391 $513,628 39.47%
Palmdale $375,822 $366,062 $326,954 $317,463 $293,658 $263,365 38.99%
Juniper Hills, Pearblossom $326,826 $319,671 $280,918 $273,911 $256,446 $230,152 38.90%
Los Angeles (South Los Angeles), Florence-Graham $470,278 $462,180 $414,024 $390,575 $365,574 $333,146 38.73%
Long Beach $528,383 $522,990 $484,979 $429,637 $402,639 $377,474 38.55%
Los Angeles (Dowtown Fashion District, South Park-South) $770,296 $775,947 $707,775 $671,235 $639,666 $561,269 38.25%
Culver City, Los Angeles (Mar Vista) $1,721,358 $1,716,140 $1,585,526 $1,584,688 $1,480,964 $1,241,998 38.18%

Could the Los Angeles Housing Market Crash?

Is California’s debt, tax problem, business exodus, regulations, and more simply too much for Californians to keep paying such lofty prices?

With the potential crash of the stock markets, before or after the elections, we’d have to expect luxury home sales and prices will also recede.  Check more on the Stock Market Forecast predictions for 2021.

Although the volume of affordable homes available for sale remain constrained in LA County, mortgage payments have declined considerably potentially enabling more buyers to get into home ownership.

California Housing Market

Sales within the California housing market are slumping with the exception of the San Francisco region.  However, sales are up strongly year over year.  Buyers are finding some reprieve in prices.

Lack of Affordable Housing is Holding the Market Down

Low home affordability continues to depress buyers in Los Angeles and across California.  After a lull in housing and economic activity, it looks like the spring market is starting strong. That’s likely due to a renewed confidence in the US and California economy and the health of Silicon Valley.

High cost of living and too high real estate prices have some businesses exiting for Arizona, Florida, Colorado, and Texas. That exodus may help ease keep home prices from running away again this summer.

This is the same issue in San Francisco Bay Area, San Diego, SacramentoFlorida, DenverChicago, and Seattle where buyers simply can’t afford the lower end of the detached housing market.

Is it instinct or just common sense that California will continue as the most desired place to live on the planet? Does the climate in San Diego, Sacramento , Bay Area, and Los Angeles, high paying jobs, interesting geography, lifestyle and recreation, make California a magnet for people around the world. Price growth is predictable.

Here’s the Hottest Zip Codes in Los Angeles

LA Curbed’s list of hot zip codes: Los Angeles’s 90012 zip code is shaping up to be the 2nd fastest growing area in the nation at 8.8% growth, 2nd behind only Gilbert AZ. The 90012 zip code includes Chinatown, the Civic Center, Elysian Park, Victor Heights, parts of the Arts District and Bunker Hill, and most of Little Tokyo.

Here’s the LA Times hot zip code list:

Santa Monica 90402 – Average home price: $3,237,500

Hermosa Beach 9025 – Average home price: $1,693,500

Lincoln Heights/Montecito 90031 – Average home price $458,500 +14.6%

City Terrace  90063 – Average home price: $320,000 +18.5%

Marina Del Rey 90292 – Average home price: $2,157,500 +23%

Manhattan Beach 90266 – Average home price: $2,100,000 +10%

Compton – 90220 – Average home price: $285,000 +9.8%

Playa Del Rey 90293 – Average home price: $1,517,500 +26.5%

Toluca Lake Studio City  91602 – Average home price: $1,022,500

Read more on the best zip codes in the US for investors and homebuyers.

LA Home Prices Fully Recovered?

The Los Angeles home price graph below courtesy of Zillow shows how prices have almost returned to pre-recession values and are beginning to level off. To forecast prices and demand for the LA region, we’d have to examine the cause of the moderation and if it’s a fact.

Is there a Housing Market Bubble?

Do you believe we’re in a California housing bubble? According to a Harvard real estate guru, bubbles don’t burst until demand dries up — an increase in unsold inventory and that’s not what’s happening. Sales are strong and California home prices are predicted to rise further.

As you’ll see from the data in this post below, there is huge demand for property. Supply is the problem.

Factors Affecting House prices and Availability in LA

  1. Housing Demand – Demand from those with wealth for single family detached, and luxury homes
  2. Housing Supply – Throttled, supply is far from what’s needed
  3. Mortgage Rates – Continuing Low, especially in light of global economic slackening
  4. Down Payment and mortgage rules – Banks are withdrawing FHA loans however some were offering down payments as low as 3%
  5. Regional Employment – Very low and remaining low
  6. Buyer Income – low and not rising much
  7. Home Prices – High and rising – out of reach for many buyers – many consider LA homes grossly over-priced
  8. Demographics – Millennials coming into family and home buying years and LA millennials have had the lowest rate of home buying (pent up demand)
  9. Number of Renters – increasing fast
  10. New Home Construction: slow (100k to 140k per year)
  11. Economic-Foreign Trade – Trump expected to reduce US deficit
  12. Election Year – Voters uncertain of what Trump will create
  13. Taxes on Sale of Home – Tax situation is great for sellers

Realtors: Check out other posts providing realtor tips, prospecting strategies, social media strategy, and tactics used by top flight luxury realtors and even lead generation companies.

See additional housing market reports on New York NYC, San Diego CA , and San Francisco CA.

Bookmark this page and return for further forecasts, predictions and market data for most major US cities including  Los Angeles, New York City, San Diego, San Francisco, Houston, Miami, Dallas, Phoenix, Denver, Seattle, Chicago, Boston, and Tampa.

The Housing Market Forecast 2022  | Sell House Now | 5 Year Real Estate Forecast | Stock Market Crash Predictions | Home Prices | Should I Sell My House Right Now? | When Should I Sell My House? | Buy House | Will the Housing Market Crash? | Housing Market Going to Crash? | Real Estate MarketWill Home Prices Fall? | California Housing Forecast | Los Angeles Houses for Sale | Will House Prices Fall?Atlanta Home Prices | San Diego Home Prices | When Will Mortgage Rates Rise? | Boston Home Prices | New York Home Prices | House Prices Tampa? | Florida Real EstateStock Market Forecast 2022

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