Los Angeles’ spring housing market got off to an early start in March with pending sales in both the single-family home and condominium segments posting double-digit annual gains.
According to a new report from residential real estate brokerage Douglas Elliman, new signed contracts for condominium units rose 88.4 percent over the same period last year. In total, 1,735 residences went from ‘active’ to ‘pending,’ a 15 percent increase from February.
The bulk of pending sales were in the $300,000 to $599,000 range, indicating that buyers priced out of the exorbitant single-family homes market may be driving the demand for comparatively affordable condos.
“Overall condo new inventory saw a modest gain,” wrote Jonathan Miller, president and CEO of Miller Samuel Inc., who compiled the report. The number of new listings climbed 3.9 percent compared to year-ago levels, amounting to 1,134 units.
Pending single-family home sales improved by 25.8 percent on an annual basis, representing 4,308 inked deals. Inventory remained extremely low with 2,395 new listings, down 46.8 percent from March 2020. The mismatch between supply and demand has led to surging single-family home prices as buyers look to take advantage of still-low mortgage rates.
“New signed contract growth is generally seeing greater year over year gains in higher price tranches,” wrote Miller. The greatest share of pending home sales belonged to properties priced between $500,000 and $899,000. A significant number of new signed contracts for $1 million to $1.99 million single-family homes were also recorded.
A recent Realtor.com report noted that the Los Angeles metropolitan area posted a 24.8 percent rise in its median listing price last month, the third-highest spike nationwide. The typical home was listed for $1,199,000, spending just one day on the market — an eye-popping statistic when you consider that in March of 2020 the median duration was 52 days.
With the busiest months of the spring market fast approaching, additional housing supply is needed to thwart worsening affordability. Mortgage rates have been climbing for seven consecutive weeks, reaching an average of 3.18 percent for a 30-year fixed-rate loan, putting even more pressure on buyers to act quickly.
However, Realtor.com Chief Economist Danielle Hale offered a glimmer of hope in the report, adding that “we might even see an extra boost in sellers as COVID-19 vaccines become more available.”
As the pace of vaccinations quickens in Los Angeles County, with an estimated 30 percent of all residents having received at least one dose, sellers could soon gain the confidence needed to put their homes on the market.