The LA real estate market continues to climb as statistics show July broke another price record. The six-county region’s median sales price rose 17.5% from July 2020 to a record $681,750 last month, according to data released by data firm DQ News. This would be the 12th straight month of double-digit median home price rises. Sales also increased 10% compared to last year.
Specifically in Los Angeles County, the median home price rose 18.7% to a record $795,000 in July, while sales climbed 20.2% compared to last year.
It's important to note that the pace of this increase has slowed down as many buyers are coming across affordability issues while also growing tired of the limited inventory and constant bidding wars.
New home construction properties are still in high demand along with nicely remodeled homes with ample outdoor space. Covid has really changed the wants and needs of today's buyers as most are really looking for outdoor space.
It's true that the market continues to climb, but the rate of this appreciation is showing signs of slowing. It's important to remember that we are still in the midst of a global pandemic. The dust has yet to settle on the ramifications of all this Government "free" money, Landlords will be soon chasing past due tenants after the moratorium is completely lifted and the true unemployment rate is unclear as many workers have opted to stay home instead of go back to work. Employers are having a very difficult time finding good help now as many workers prefer to not work and continue to utilize the temporary government programs for income.
As the rental moratorium will be lifted soon (September 30, 2021), we are seeing a strong increase in demand for rentals. During the heights of covid, many landlords were forced to reduce rental rates and even offer free months to entice the very limited tenant pool to sign a lease. The rental market is very different now and we anticipate rental prices should start to appreciate quickly back to pre-covid prices and beyond when the moratorium is lifted for good.
Seasonally speaking, we are now in the less active time of the market. Most students are back to school, with a mix of in person and zoom learning. Schools are a major factor for purchasing a home so many parents want to have that settled before the school year starts. We expect inventory levels to fall as we approach the holiday season - which is normal during this time of year.
The stock market also broke another record in August - while interest rates still hover near 3%, no change from last month. The unemployment rate declined in the month of July down to 5.4% from 5.9% in June.
Los Angeles is a city of its own. The demand to live here will always be high - but the market is showing signs of slowing as we start to prepare for the holiday season. No one really knows where the market is going but many feel that prices are near their tops and a correction may be coming. Only time will tell.....