In July, new signed contracts for single-family homes in Los Angeles declined on an annual basis for the first time in seven months. That’s according to the latest report from residential real estate brokerage Douglas Elliman, which pointed to a 2.2 percent year-over-year drop in pending single-family home sales.
There were 4,227 new signed contracts for single-family homes in July, compared to 4,374 inked deals during the same period last year. California’s stay-at-home order during the spring of 2020 — traditionally the busiest season for the real estate industry — led to a wave of pent-up demand for detached homes last summer.
Pending single-family home sales increased by 9.5 percent from June to July, with the largest share of transactions occurring in the $1 million to $1.99 million range. Annual home sales in the upper end of the market surged, while sales of homes priced under $700,000 fell sharply due to extremely limited supply.
New listings for single-family homes plummeted 48.4 percent year-over-year to 3,154 properties. Supply improved by 10.4 percent over the previous month, signaling that homeowners may be warming up to the idea of putting their homes on the market. Over a quarter of newly listed homes were priced between $1 million and $1.99 million, while the next highest share of listings belonged to homes asking $700,000 to $899,000.
“New signed contract volume for single families compared to the prior year went negative for the first time since December, finally overpowered by the fifty percent average annual decline in new listings each month since November,” wrote report author Jonathan Miller, president and CEO of Miller Samuel Inc.
Condo sales, on the other hand, have improved tremendously since last year when shuttered building amenities and highly-trafficked common areas made multifamily housing less desirable. Last month, 1,554 pending condo sales were recorded — a 64.8 percent boost over July 2020 when just 943 units went from ‘active’ to ‘pending.’ July’s performance also marked a 3.9 percent sales increase from June.
“Condo new signed contracts have been rising year over year since last September and accelerated since January,” added Miller.
The highest number of new signed contracts fell within the $300,000 to $599,000 range, suggesting that buyers who have been priced out of the single-family market are turning to comparatively affordable condos to achieve their homeownership dreams.
New condo listings fell 24.3 percent annually to 1,349, but rose 13.5 percent from June to July. The largest share of fresh listings was for condos asking between $300,000 and $499,000, but a significant number of luxury condos in the $1 million to $1.99 million range also hit the market last month.
Supply has improved for high-priced condo units, while it has fallen precipitously for units seeking less than $500,000, posing challenges for first-time buyers in Los Angeles looking to enter the market.