There’s a general sense across the country and California that the housing market is beginning to normalize after an unprecedented year of pandemic-induced demand.
But the situation in Los Angeles is as frenzied as ever, with closed escrow sales of existing, single-family detached homes climbing 8.5 percent from May to June, according to the California Association of Realtors. Compared to the same period last year — when prospective buyers were just beginning to test the waters — sales are up a whopping 42.4 percent.
The typical LA home sold for $796,120 last month, a 9.7 percent improvement over May’s median price of $725,000. On an annual basis, the median home price soared 28.5 percent, equating to a price difference of more than $175,000.
There was a 1.8-month supply of unsold inventory at the current pace of sales, down from 2.0 months in May and 3.0 months one year ago. For context, a balanced market has between four and six months of supply, and anything below that range stands firmly in seller’s market territory.
LA homes typically spent eight days on the market in June, unchanged from the month before. During June 2020, it took a median of 17 days for a property to go from ‘active’ to ‘pending.’
While homes are still going under contract at lightning speed, a recent Redfin report suggests that the prevalence of bidding wars has waned in Los Angeles. The share of Redfin offers that faced a multiple offer scenario decreased from 72.1 percent in May to 64.1 percent in June. The bidding war rate is now lower than it was a year ago, when 68.8 percent of Redfin agents encountered competing bids.
Statewide, there were 436,020 home sales recorded in June on a seasonally-adjusted basis, a 2.2 percent drop from May. This marked the second consecutive month of falling sales, however, activity is still up 28.3 percent compared to June 2020.
California’s median home price set yet another record in June, ticking up 0.2 percent month-over-month to $819,630. Prices have surged over 30 percent in the past 12 months, fueled by low inventory levels and mortgage rates. Although it was the third month in a row that the median home price exceeded $800,000, the report noted that “the pace of growth in home prices [appears] to be decelerating.”
“We are expecting price growth to slow from this point on as the top end of the market begins moderating,” said CAR Vice President and Chief Economist Jordan Levine. “With pending sales down for the first time in 14 months, closed sales – which have been [declining] 5 out of the last 6 months – will likely remain lackluster as the market enters the second half of the year.”