Los Angeles Housing Market

How many homebuyers in Los Angeles are asking when LA home prices will fall? Is the LA housing bubble finally about to burst?

Buyers in LA still hold out hope for home prices to ease and plenty of properties will soon be listed in 2022. Although inventories are growing, it is not in the affordable category, and prices only flattened in April according to CAR.  They were raging this late winter. And the median home price in California did hit another all time high.

And with the economy recovering somewhat, jobs up, wages rising, and millennials never wanting to give up on owning rather than renting (for their new family formation) demand is still brisk.  In fact, many investors continue to see LA as the best place to invest. If 160,000 people hadn’t left California in 2021, the housing market would be under much more pressure.

Here’s a Quick Overview of the Los Angeles Real Estate Market

  • Current Median House Price: $900,000 (+8.7% year over year)
  • Homes Inventory: 5995 homes
  • Median Days On Market: 25
  • Median Monthly Rent: $2,661 (San Francisco is $3230)
  • Price-To-Rent Ratio: 29
  • Median wage in Los Angeles $67,318 /year (ziprecruiter)
  • Unemployment Rate: 4.7% (bls.gov)

Homes sold over asking in April set a new record high of 72.8% and the normal big home sales months are just ahead.

In LA County, in April, home sales were down 13% vs last April, yet home prices hit $900,000 which is up 9.1% since last year. The sales to list price is still a strong 103.5% in April.

LA county home sales report.
LA county home sales report. Screenshot courtesy of CAR.org.

In May so far sales and listing have fallen, yet Realtors, ever optimistic believe listings, prices and sales are on the rise.

May housing market update or California.
May housing market update or California. Screenshot courtesy of Car.org.

Sales and pending sales are currently slumping. Across California in April 2022 Sales slumped 1.9% from march at 419,040 which is down 7.4% Year to datee, down 8.5% since last April.

Southern California home price and sales change.
Southern California home price and sales change. Screenshot courtesy of Car.org.
Southern California home price history.
Southern California home price history. Screenshot courtesy of Car.org.

Home prices rose 2.6% since March and are up 10% year over year in LA County. That rate is well behind home price growth in the Bay Area, which saw an average 6.6% rise in April, which is up 15.9% since last April.

Southern California home price comparison year over year, month to month.

Southern California home price comparison year over year, month to month. Screenshot courtesy of Car.org.

Mortgage Payments Really Hurting

The matter of housing affordability is out of hand as mortgage payments are taking a big chunk out of homebuyers income. Mortgage payment growth is up a frightening 36.8%, even though price growth only pikced up by 8.7%.

California home mortgage payment growth 2022.
California home mortgage payment growth 2022. Screenshot courtesy of Car.org.

Home inventory on the market has grown as have active listings (23.6% year over year) , however they’re still near historic lows.

Redfin Los Angeles Report

Redfin reports LA homes prices rose 12.8% to $1,019,000 in April, while the number of homes sold dropped 15.6% year over year.  Median house prices jumped 13.6% to a new price of $1,250,000 up slightly over March prices, while condo prices jumped 11.9% to a median of $705,000.

Redfin 5 year price history for Los Angeles, California.
Redfin 5 year price history for Los Angeles, California. Screenshot courtesy of Redfin.

Los Angeles Housing Market – Redfin

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

Los Angeles County Prices In April 2022

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

City of Los Angeles home prices.
City of Los Angeles home prices. Screenshot courtesy of First Team Realty. See more at firstteam.com/local-market-reports/

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/

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.  With Ukrainian agriculture exports stopped and China imports dwindling, it may create more demand for California’s output and prices charged are much higher.

The biggest factor for home prices is NIMBYism, building regulations,  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 continuously. With a limited supply, prices can only rocket across Los Angeles.  California is in mountainous debt, and taxes must be paid, and they will be passed onto home sellers and home owners (property taxes).

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.

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 even if growing
  3. Mortgage Rates – rising creating very high mortgage rates
  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 enough to keep up with inflation
  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 – deglobalization and reduced international trade may slow job growth in tech, but agricultural demand may increase
  12. Election Year – mid term elections may see Republicans sweep to power
  13. Taxes on Sale of Home – Taxes are a big concern for buyers
  14. Sellers leaving California for low tax states including Florida and Texas.

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See additional housing market forecast reports on New York NYC, San Diego CA , Denver, Austin, and San Francisco CA.  See the California and Florida market reports.