For-sale homes in the Los Angeles-Long Beach-Anaheim metropolitan area are going from “active” to “pending” in just 19 days on average, according to Zillow’s weekly market report and June 2020 data summary. That statistic is as of July 11th, but compared to the same period last year, homes are transitioning to pending status nine days sooner.
In January of this year, before COVID-19 had reached California, homes in and around Los Angeles typically spent 50 days on the market. While winter is a notoriously slow season for real estate, the disparity between the two months is especially pronounced.
Record-low 30-year fixed mortgage rates, which fell below three percent last week, coupled with sparse inventory levels are causing homes to sell within a matter of days. Buyers who were planning to purchase a home this spring were delayed by Mayor Eric Garcetti’s ban on in-person home showings in April, leading to pent-up demand for a limited number of properties.
For-sale inventory improved slightly from May to June but dipped again in early July to -26.6 percent year-over-year. The number of brand new listings increased by 16.4 percent from June to July but were still down 15.5 percent over 2019 totals. While Zillow says the fresh listings are a promising sign, it’s likely that “buyer demand is outpacing the flow of new listings.”
The scarcity of homes for sale has supported prices throughout the pandemic. The median list price for an LA area home hit $933,532 on July 11th, 10.3 percent higher than the same time a year ago. Luxury home sales have remained robust over the past few months, which could be pushing the median higher as sellers see potential in the market.
The median sale price, on the other hand, inched up 0.8 percent to $654,490 at the end of May. This figure has been fluctuating since April when the effects of the pandemic began to play out in the real estate market.
Newly pending listings for the period ending July 11th dropped 9.8 percent week-over-week and 2.5 percent month-over-month, which can be attributed to the lack of available homes for sale. The demand is certainly there, but the for-sale properties are not.
Refuting the idea of pandemic pricing, the share of listings with a price cut decreased to -1.9 percent year-over-year. There are few bargains to be found when the LA market is as hot as the summer heat.