It was a December to remember for the Los Angeles housing market.
Instead of hitting the mall for last-minute gifts or jetting off on ski vacations, it appears that many Angelenos spent the last month of the year touring for-sale properties and submitting offers.
According to a report released today by the California Association of Realtors (CAR), December sales of existing, single-family homes climbed 30.5 percent annually. Historically December is a slow period for real estate transactions, but December 2020 outperformed November, recording a 22.1 percent increase in sales month-over-month.
The median home price hit $709,500, up 6.8 percent from November when the typical home sold for $664,160. Compared to the previous year, Los Angeles’ median home price rose 10.6 percent. The unsold inventory index plummeted to 1.4 months of supply, down from 2.1 months in November and 2.8 months in December 2019.
Surging COVID-19 cases and holiday festivities likely caused fewer homeowners to list their properties for sale, leading to fierce competition among buyers — including bidding wars. The median number of days it took to sell a home in Los Angeles was 11 days, up slightly from November but a whopping 20 days faster than the same time one year ago.
Despite rising prices, homebuyers are still keen to take advantage of low interest rates, which averaged 2.68 percent for a 30-year, fixed-rate mortgage in December, according to Freddie Mac. There is some indication that mortgage rates will tick up in 2021, which caused a boost in mortgage applications and refinance activity in early January.
Statewide, December home sales shot up 28 percent year-over-year and a modest 0.2 percent from November. The median home price amounted to $717,930, an improvement of 2.7 percent over the month prior and 16.8 percent on an annualized basis. A dearth of listings, which are down more than 40 percent year-over-year, have kept prices elevated. December logged the seventh straight month of declining inventory.
The report offered a promising takeaway, noting that the spring lockdown wasn’t enough to quell annual home sales, which posted a 3.5 percent gain over 2019’s total. Preliminary tallies suggest there were 411,870 closed escrow sales in California last year compared to 397,960 in all of 2019.
“It’s a testament to the strength of the market that even after the pandemic effectively shut down the spring home-buying season in 2020, the market still was able to recover the substantial sales lost in the first half of the year and even top 2019’s levels,” said CAR President Dave Walsh.