After dipping their toes into the market in May, LA homebuyers took the plunge in June.
According to the California Association Of Realtors’ (CAR) latest resale housing report, sales of existing single-family homes in the city rose 37.5 percent month-over-month.
Amid historically low inventory levels and mortgage rates, the median price of a single-family home surged 11.6 percent from May to June to $610,260. Home prices ticked up 1.8 percent over the same period last year, however, overall sales are still down 19 percent compared to 2019 levels.
The median single-family home sat on the market for 17 days in June, one day greater than the month prior but still a slight improvement over the 19-day total recorded last year. The unsold inventory index fell from 4.3 months in May to 3.0 months in June as eager buyers snatched up properties. In June 2019, there were 3.4 months of supply, which is still extremely tight given that six months is considered “healthy.”
Statewide, single-family home sales posted a seasonally adjusted annualized rate of 339,910, representing a 42.4 percent increase from May to June — the steepest monthly climb recorded in almost 40 years.
“Home sales bounced back solidly in June after hitting a record bottom in May, as lockdown restrictions loosened and pent up demand driven by record-low interest rates roared back,” said CAR President Jeanne Radsick.
“While the momentum is expected to be sustained as we kick off the third quarter, the resurgence in coronavirus cases remains a concern and may hinder the market recovery in the second half of the year.”
California’s median single-family home price climbed 6.5 percent month-over-month to $626,170, setting another record for the highest May-to-June change. This figure marked a 2.5 percent price increase over June 2019.
Sales of homes priced over $1 million bounced back more quickly than those priced under $500,000, which, in part, caused the statewide median to escalate. Luxury homes that sold for more than $1 million made up 18.1 percent of the market share in June compared to 15.6 percent the month before.
Affluent buyers, who have been largely unaffected by the COVID-19 pandemic, are seizing this opportunity to take advantage of low interest rates. Meantime, those at the lower end of the market have been forced to put their home buying dreams on hold due to financial constraints.
“It [highlights] both the affordability and supply issues created by the uneven impact of the coronavirus pandemic as the more affordable segments of the state’s housing market are recovering at a slower pace,” said CAR Senior Vice President and Chief Economist Leslie Appleton-Young.