We will discuss the latest Los Angeles housing market trends & news and find out how they can affect the investors and homebuyers in the latter half of 2020. The shutdown due to coronavirus pandemic had an impact on the California economy and the real estate sector well. Home sales dropped over the past couple of months but prices remain high. Southern California home sales fell 26.6% in April compared with a month earlier, while year-over-year sales were down by 31.5%. In April 2020, the median sold price of existing single-family homes in the Los Angeles Metro Area was $550,000, a year-over-year increase of 2.5%. As compared to March the median sold price decreased by 1.1%. Home sales in the Los Angeles metro housing market decreased by 30.9% as compared to the previous year. As compared to March the home sales decreased by 21.2%. Is it the right time to buy a house in Los Angles? This is a never-ending question with no definitive answer. Buyers believe it is a very good time to buy a home in Los Angeles. Mortgage applications to purchase a home are increasing with the easing of restrictions. The number of buyers is slightly down, and more housing will soon be listed which may bring the prices down. A huge number of job losses and unemployment claims are keeping new homebuyers away from the market, so that means there would be less competition for buyers to purchase their ideal home. According to the forecast by CoreLogic, home price drops aren’t expected in Southern California. Prices instead are forecast to rise 3% in Los Angeles County by April 2021, 5% in Orange County, and 6% in the Inland Empire. Therefore, this a relatively good time for homebuyers in Los Angeles before prices start ticking up again. The latest “LOS ANGELES MARKET REPORT” is given below. Home prices are steady despite a drop in sales due to coronavirus pandemic.  Let’s talk a bit about Los Angeles the surrounding metro area before we discuss what lies ahead for investors and homebuyers. Los Angeles is home to around four million people. It is the largest city in California and the second-largest in the United States. The L.A. metropolitan area with over 13 million people rivals New York in population as the largest in the country. However, being a huge real estate market is not reason enough to invest here. The Los Angeles real estate market is considered as one of the premier markets for both investors and homeowners. It is also touted as the nation’s least affordable housing market. If you look at the long-term, it’s always a good investment to buy in Los Angeles. It is said that you will always get your money back or you would make a profit, as Los Angeles has a track record of being a great long term investment. The real estate appreciation rate in Los Angeles is predicted to remain a bit modest throughout this year. The strong demand and tight inventory keep on pushing the prices higher in LA.  According to several real estate experts, the home values in Los Angeles will continue to rise in 2020, but at a significantly slower rate than the nationwide average. According to Realtor.com’s recent housing market report, the Los Angeles-Long Beach-Anaheim would see a 0.7% rise in home values in 2020. The real estate sales in the region would drop by -6.0%. The home prices are expected to flatten nationwide, increasing by just 0.8%, and buyers will continue to move to affordability, benefiting mid-sized markets. The real estate appreciation rate in Los Angeles in the latest quarter was around 0.66% which equates to an annual appreciation rate of 2.68%. Again, this is a good sign for buyers and investors as the price forecast shows a modest increase.

How is Los Angeles For Real Estate Investment? Not every real estate investor wants to enter the most expensive and competitive Los Angeles real estate market. For buyers, the affordability is dropping and only 30% of LA county residents own a home. Home Prices are so high and out of reach for many buyers – many consider LA homes grossly over-priced. While Los Angeles home prices may be increasing slightly over the next year, the fact remains that there are many homes available at fair prices.

Growing household formations, ongoing job creation, and rising wage growth are fueling housing demand,” said NAHB Chief Economist Robert Dietz. “But a record-low resale inventory, coupled with underbuilding as builders deal with supply-side constraints, continue to put upward pressure on home prices even as interest rates remain at low levels.” There’s still a strong opportunity for rental property investment in Los Angeles. There is a strong and continuous demand for apartments for rent in LA.

This is fueled by always tight inventory, severe competition from tenants, rising wages, and a good economy. Therefore, for a great opportunity for rental income for investors. Let’s find some other factors that make LA a good place to invest for wealthy buyers. You will get a fair amount of knowledge of the fundamentals of this hot real estate market.

Please note that real estate prices are deeply cyclical because its demand side is impacted by economic cycles. Much of it is dependent on factors you can’t control. The recent example is COVID-19 which has badly impacted our economy. Therefore, many variables can potentially impact the value of the real estate in LA in 2020 (or any other market) and some of these variables are impossible to predict in advance.

Los Angeles Housing Market Trends & News 2020

We shall now discuss some of the most recent Los Angeles real estate trends & news, and compare it with the past couple of years. We shall mainly discuss median home prices, inventory, economy, growth, and neighborhoods, which will help you understand the way the local real estate market moves in this region. Los Angeles is also one of the hottest real estate markets in the nation. In the past ten years, the annual real estate appreciation rate has amounted to 6.34%, according to NeighborhoodScout.com. This puts Los Angeles in the top 10% nationally for real estate appreciation.

Los Angeles Housing Market Report Before COVID-19 Hit The Country

Let us discuss some of the statistics of the Los Angeles housing market for the last couple of years. In 2018, the home prices in Los Angeles reached record heights, climbing to levels far above those recorded in the years leading up to the Great Recession. If we check historical data, in Los Angeles and Orange counties, year-over-year price increases peaked at 8.2% in April 2018 and have declined every month since. In October 2018, the home prices in Los Angeles and Orange counties rose 5.5% over the previous year, according to the latest available data from the closely watched S&P CoreLogic Case-Shiller index. A big factor, according to experts, is that many would-be buyers are increasingly priced out. But real estate agents also say a growing number of people who could buy, like Saavedra, have decided they don’t want to pull the trigger at the top. Home values in Los Angeles are up less than 3 percent since last year. After years of steady escalation, home prices in Los Angeles County are tapering off, according to a new report from CoreLogic. They find that the Los Angeles county’s median home price was $579,500 in January, down slightly from December’s median price of $581,500. That’s a 2.6 percent increase over the same time last year. By this comparison, prices shot up nearly 8 percent between January 2017 and January 2018. Prices continued to rise through much of 2018 but began to drop heading into Q4 2018. In Q4 2019, home prices were still slightly higher than a year earlier, but the spread has narrowed. 2018’s FRM interest rate increase decreased the principal amount homebuyers can borrow while making the same sustainable mortgage payment. The National Association of Home Builders and Wells Fargo Housing Opportunity Index has given the title of least affordable housing market to Los Angeles. In Los Angeles-Long Beach-Glendale region, only 11.3% of homes sold during the fourth quarter of 2019 were affordable to families earning the area’s median income of $73,100. The median price of a single-family home in Los Angeles County was $650,000 in January, representing a sizable 8.5 percent increase over a year earlier. A median-priced condo cost $515,000, a more modest 1 percent uptick over January 2019. The prices dropped off a bit every month, by nearly 5 percent for condos and 0.5 percent for single-family homes. According to the CALIFORNIA ASSOCIATION OF REALTORS, the unsold inventory in February was equal to 3.6 months for single-family detached homes, up 12.5% MTM and down -29.4% year-to-year. The median price of single-family detached homes was $580,690, down 6% MTM, and up 7.3% year-to-year. Low-interest rates and strong employment lead to some stellar sales results in February in most counties of California. Data gathered by the California Association of Realtors suggest that single-family homes, in particular, are fetching far lower prices now than they were during the summer when Los Angeles real estate values reached an all-time high. The association reports that the median sold price of an existing (not newly built) single-family home in the Los Angeles Metropolitan Area was $550,000 in February 2020, up 8.9% from last year. From Jan to Feb, the median sold price increased by 2.1 percent. This beginning of 2020 has been good for Los Angeles single-family homes.

Latest Los Angeles Real Estate Market Forecast 2020 – 2021

What are the Los Angeles real estate market predictions for 2020? Let us look at the price trends recorded by Zillow over the past few years. Since 2015, the median home price in Los Angeles has appreciated by roughly 38% from $545,000 to $752,508. The prices rose by 5.8% over the 12 months alone. Last year saw was the seventh consecutive year of home price gains. The Zillow Buyer-Seller Index (BSI) shows that Los Angeles is currently the balanced real estate market. This is computed monthly. In other words, based on the last month’s key housing market indicators, current supply meets the demand, giving buyers & sellers an equal advantage in price negotiations. There are as many homes for sale as there are active buyers in the marketplace. The latest Los Angeles real estate market forecast is that the home prices may remain flat or decrease by 0.4% – in the next twelve months. This could be due to the short term impact of the ongoing pandemic which has impeded the real estate sales activity in the entire nation. The question is whether it is going to remain a sizzling real estate market amid the ongoing Coronavirus pandemic?

OUR TAKE ON LOS ANGELES HOUSING MARKET FORECAST

We think that in 2020, the Los Angeles housing market would remain neutral. The home sales will drop temporarily without affecting the prices. Usually, this region remains skewed to sellers. However, in the current cycle, the home prices may remain flat to favor buyers. Affordability is a big issue in Los Angeles County as nearly three in four residents can’t afford to buy a median-priced home in the area. According to HousingWire, an index that combined median income and median home prices made Los Angeles the least affordable city in the country, and several younger residents said they were concerned they will never be able to afford a house. According to Zillow, the home shoppers are leaving Los Angeles for cheaper metros, the most popular being Las Vegas.  Their data shows that the Los Angeles housing market is currently a balanced market which means there is a healthy balance between the no. of qualified buyers in the market place and homes for sale. For anyone looking to buy a home in the LA metro area right now, the real good news is the increase in the number of homes to choose from. The region is already showing signs of softening and could come under further pressure if the economy and job growth weakens. Between March 2020 and April 2020, total nonfarm employment in Los Angeles County decreased by 685,000 to 3,884,400. The current health crisis had a direct impact on every major industry sector and reduced total nonfarm employment by 15 percent, or 685,000 jobs. This is the largest month-over nonfarm employment downturn in contemporary record-keeping. Before this month, the largest month-over decline was 127,900 jobs in January 2009. It is expected that there will be some improvement in the inventory crisis due to COVID-19. If buyer demand eases, we could see a positive influence on Los Angeles’ low inventory levels while at the same time seeing a negative impact on sales. Certain areas in the LA metro housing market would see more properties for sale on the market than in other locations.
Here is another short and crisp Los Angeles housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for Los Angeles is 78% and it is predicting a positive trend. LittleBigHomes.com estimates that the probability of rising home prices in Los Angeles is 78% during this period. If this price forecast is correct, the Los Angeles home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.

Los Angeles Real Estate Market: Los Angeles, CA Homes For Sale

Los Angeles has a mixture of owner-occupied and renter-occupied housing units. According to Neighborhoodscout.com, a real estate data provider, one and two-bedroom large apartment complexes are the most common housing units in Los Angeles. Other types of housing that are prevalent in Los Angeles include single-family detached homes, duplexes, row houses and homes converted to apartments. Single-family homes account for about 40% of Los Angeles’ housing units. In April 2020, the single-family homes posted their biggest percentage gains of the year so far in the Los Angeles metro area. House prices increased by 4.9% in Los Angeles County, 3.7% in Orange County, and 5% in the Inland Empire. Currently, there are 6375 homes for sale in Los Angeles on Zillow, an online real estate database company. Additionally, there are 2561 homes for rent. Under potential listings, there are about 49 Foreclosed and 1324 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
  • The median list price per square foot in Los Angeles is $551, which is higher than the Los Angeles-Long Beach-Anaheim Metro average of $447.
  • The median price of current listings is $859,000.
  • The median price of homes that were sold in March is $760,200.
  • The median rent price is $3,500, which is higher than the Los Angeles-Long Beach-Anaheim Metro median of $3,200.
There are currently 9370 homes for sale and 7971 homes for rent in Los Angeles, CA on Realtor.com, a real estate listings website. According to their statistics, in April 2020 the Los Angeles housing market was a buyer’s market, which means there were roughly more active homes for sale than there were buyers. In May 2020, the median list price of homes in Los Angeles, CA was $920K, trending up 8.4% year-over-year. The median listing price per square foot was $515. The median sale price was $760K. Ideally, a buyer would prefer a sale to asking price ratio that’s closer to 90%. The sellers in Los Angeles have managed to hold good leverage in these negotiations in the past month. On average, they could sell homes for 99.47% of the asking price. A seller would always prefer scenarios that can yield a ratio of 100% or higher.