While new signed contracts for single-family homes and condos posted year-over-year gains in August, there are emerging signs that pent-up demand caused by Los Angeles’ spring stay-at-home order is beginning to wane.
A new report from residential real estate brokerage Douglas Elliman indicates that pending single-family home sales last month were up 7.4 percent over August 2019. A total of 4,492 new contracts were signed, an impressive performance for a historically slow sales month, but an 18.7 percent dip compared to July’s unprecedented activity level.
Most of the new signed contracts were for homes priced between $600,000 and $2 million, unsurprising given that the median listing price for the Los Angeles-Long Beach-Anaheim, CA metropolitan area reached $999,100 last month, according to Realtor.com data.
Fresh listings plunged even further, down 48.8 percent over the same period a year ago. Only 2,911 newly-listed homes hit the market last month, compared to 4,665 in July.
“New signed contract activity for single-family and condos remained higher than year-ago levels but showed signs of peaking,” wrote Jonathan Miller, the president and CEO of Miller Samuel Inc.
LA’s condo market fared slightly better, with activity rising 8.5 percent over the previous year to 1,525 new signed contracts. This figure was relatively on par with July, when 1,585 pending sales were recorded.
Condo inventory actually improved, ticking up 0.2 percent compared to August 2019. There were 1,440 new listings last month, a 24 percent surge over July’s total. Anecdotal evidence suggests that condo dwellers may be looking to make the leap to single-family homes with additional living space, but sky-high prices may dissuade many of them from buying locally.
A recent migration analysis conducted by Redfin found that 16.3 percent of Los Angeles-area home shoppers searched for listings outside of the city, with Las Vegas, Phoenix, Dallas and Seattle ranking among the top out-of-state destinations.
Now that classes have resumed for the Los Angeles Unified School District, we could see an even more pronounced sales slowdown in the months ahead as families grapple with online learning and the holiday season approaches.