LA Curbed: LA real estate market may be shifting toward buyers
Is Los Angeles turning into a buyer’s market?
With typical home prices eight times higher than the median income, that might be a stretch—but two new reports from Zillow suggest home shoppers may have a slightly easier time navigating the city’s daunting real estate market in coming months.
One of those reports indicates that 21,357 homes were listed for sale in January across the entire Los Angeles metropolitan area. That’s nearly a 30 percent increase since a year ago and the highest number since 2016.
More homes on the market means that buyers have more options when shopping around. That in turn makes bidding wars less likely and encourages sellers to accept offers below a home’s asking price.
A separate report from the company confirms that competition among buyers is tapering off. It reveals that 26.3 percent of homes in the LA metro area sold above asking price in December, down from 35.1 percent throughout 2017.
The effect of more inventory—and fewer bidding wars—may be showing up in recent sale price data. Real estate data tracker CoreLogic found that in December, the median home price in LA County was just 2 percent higher than a year earlier.
Zillow estimates that January’s sale prices inched up 3.3 percent since last year across the LA metro.
The number of homes on the market has also risen on a national basis, though only by 1.2 percent. In Los Angeles, sellers are listing homes at a faster pace, but the total number available is still below LA’s historical average.
“Buyers should not mistake a few more options for a sudden bounty,” warns Zillow economist Aaron Terrazas, explaining that home prices are continuing to escalate due to “high demand from buyers and limited availability of homes for sale.”
On a positive note: Mortgage interest rates, which can affect buyers’ budgets dramatically, dropped considerably in January and have settled in at a level far below where they were in late 2018.