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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.

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.

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

Single family home prices in Southern California:

Southern California Condo prices during June:

Sales price to listing price rises by 104%.

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

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.

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Los Angeles Housing Market – 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.

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/

Hot Topic for 2021/2022
Are LA Home prices about to rocket, and is this a bad time to be buying?
Share your thoughts with friends!

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.

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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.

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%

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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?

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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.

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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.

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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, Sacramento, Florida, Denver, Chicago, 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.

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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

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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.