If you’re a first-time buyer on a budget in Los Angeles County, browsing listings for single-family homes can be downright discouraging. While a budget of $600,000 might net you a 700-square-foot bungalow in need of a full-gut renovation, with the same amount of cash you could likely score a well-kept condo with a couple of bedrooms and a balcony to boot.
A new report from real estate brokerage Douglas Elliman shows that Angelenos continue to warm up to the idea of condo living — especially now that demand, combined with low inventory and favorable interest rates, has pushed the median list price of a single-family home well above $1 million.
According to the Douglas Elliman report, new signed contracts for LA condos surged 90.4 percent year-over-year in February, amounting to 1,491 transactions. The highest volume of pending condo sales was in the $300,000 to $599,000 range.
The condo segment has been gaining momentum since July 2020, but February marked the “largest annual increase in new signed contracts since this report series began last April,” wrote Jonathan Miller, president and CEO of Miller Samuel Inc., who compiled the report.
Despite escalating sales activity, up nearly 17 percent from January, condo inventory remained near record lows. New listings were down 15.2 percent compared to the same period last year, totaling 1,031. This figure was on par with the previous month, exemplifying just how competitive the residential real estate market has become for current buyers.
Pending single-family home sales remained strong, with new signed contracts increasing by 30 percent annually. There were 3,681 deals inked in February, with the highest concentrations in the $500,000 to $699,000 and $1 million to $1.99 million ranges.
The number of transactions was 13.4 percent higher than in January, however, fresh listings for single-family homes declined further, falling 3.4 percent month-over-month. On an annual basis, new inventory plummeted 58.4 percent, which Miller says is “keeping the pressure up on the market.”
With Los Angeles condo and single-family home prices reaching new heights, and the average 30-year fixed mortgage rate surpassing 3 percent for the first time since July, we could see a slowdown in the market in the months to come. Although spring is historically the busiest season for residential real estate, if supply does not improve, the pool of buyers who can afford to purchase a home or condo will inevitably shrink.