Pending Los Angeles County home and condo sales dipped in June, raising questions over whether this is merely a seasonal slowdown or a signal that the market is beginning to normalize.
According to the latest report from residential real estate brokerage Douglas Elliman, new signed contracts for single-family homes fell 3.3 percent from May to June, marking the third consecutive monthly decline. There were 3,891 transactions, up 18 percent over the same period last year when the real estate market was still in recovery mode.
New single-family home listings, which totaled 2,841, improved slightly over the previous month but were down 47.6 percent compared to June 2020. Ultra-low inventory is pushing home prices to record highs, prompting some prospective homebuyers to step to the sidelines.
The largest share of pending home sales were for properties priced between $1 million and $1.99 million. By contrast, most new signed contracts in June 2020 were for $500,000 to $699,000 homes.
Pending condo sales have also been dwindling since March, although June’s total of 1,495 freshly inked deals remained 124.8 percent above year-ago levels when demand for multifamily housing plummeted.
“Condo new signed contracts have been rising annually every month since last August at a higher rate than single families, attributable to the much larger decline in single family new inventory over the same period,” wrote report author Jonathan Miller, president and CEO of Miller Samuel Inc.
On a monthly basis, new signed contracts dropped 0.8 percent as fresh listings increased by more than 11 percent to 1,178 properties. While inventory is improving in the condo segment, it’s still down 18.5 percent over June 2020.
The largest number of new signed contracts were for condos priced between $300,000 and $499,000. Condos remain an attractive entry point into the market for first-time buyers looking to take advantage of low interest rates.
Miller noted that new signed contracts for both single-family homes and condos “were on par with the same period in 2019, albeit with much less new inventory coming to market.”
Dismayed by high prices, bidding wars and low inventory, many Los Angeles County buyers are pressing pause on their home buying plans — at least for now. Some housing experts believe that buyer demand could pick up again in the fall once families have returned from their summer vacations.