August 2022 State and Los Angeles County Market Reports

Calif August sales and price report

Statewide, California inventory reached highest level since 2019, but at 2.9 months of supply is still well under the norm of 6 months.  Both time on market and median price of a single family home were up, making some sellers who only knew the previous pandemic market ask why it was taking "so long" to sell?  Well, there's nothing wrong with being on the market 19 days before selling. It actually is good to give both buyers and sellers time to think about choice of property and for sellers to review an offer.

Los Angeles County Market Update

 

For the County of Los Angeles, inventory in August was at 3.1 months, with the median price of a single family home at $854,960, a 1% increase from the prior month, and a 3% increase from one year prior.  But total home sales in the County decreased over 29% from this time last year, although they increased about 1% from the previous month.   Median time on market for the County was 16 days, a 77% increase from this time last year.

Interest rate volatility, and upward jumps, have had an impact for many buyers, and with conventional rates around or above the 6% level now, although still low by historical standards, will continue to impact buyers dependent on mortgage financing.  From California Association of Realtors:

“It’s encouraging to see that August’s sales pace rebounded above an annualized 300,000 units sold,” said C.A.R. Vice President and Chief Economist Jordan Levine. “Although we do not expect a rapid bounce-back because the Fed is expected to continue raising interest rates to get inflation under control, the monthly increase in closed and pending sales suggests that the market may have already priced in most of the rate increases to date. Still, buyers will continue to grapple with rising costs of borrowing, which will keep home sales below the 350,000 annualized pace for the remainder of the year.”

 

Julia Huntsman, REALTOR, Broker | http://www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

How Much Froth in the Housing Market is There?

Mortgage interest rates have been volatile, going up and down on a daily basis--today's rate (August 17) is at 5.22% per https://thefinancials.com for a 30-year mortgage, but recently it was up past 6%.  This has been affecting buyer behavior a lot for the purchase market, and has been slowing the sales volume for sellers.  However, while market time is longer than it was in the crazy pandemic purchase market, it is still not a buyer's market, just a somewhat longer selling time for sellers. 

Credit: Steven Thomas--Housing Reports

Price reductions in Los Angeles County equals 35% of market listings as of last week; Orange County reductions at 39% of market listings last week, and so on for Southern California counties. 

What counts right now for sellers is really taking stock of how you as a seller compare to your nearby home sales in terms of curb appeal, views, upgrades, remodels, and showing condition, on a more specific level than has been happening since before the pandemic price surge.  There are more listings on the market, but still not at the "normal" 6 month inventory level, and in fact, the Long Beach inventory level for July single family homes and condominiums was still only 1.9 months! On a national basis, it's more like 3 months--so in spite of the media attention given to some kind of housing debacle, there is in fact still a demand for inventory.  Increased interest rates have definitely affected buyers--the super low rates are not around, and the higher rates have pushed up monthly mortgage costs that many people cannot absorb.

 For a more complete weekly analysis of the Southern California real estate market, visit Orange County economist Steven Thomas at his weekly show.

Local market update for average single family home prices in July by zip code: 

Long Beach

90803 - $1,665,375

90815 - $1,008,650

90808 - $1,093,065

90806 - $728,800

Lakewood 

90712 - $817,938 

90713 - $855,535 

Signal Hill

$1,170,000 

Cerritos

$1,022,733

If you are thinking of selling, or would just like to know the market pricing for your home in the next 30-60 days, please contact me, I will be happy to assist you in person or online.  

 

Julia Huntsman, REALTOR, Broker | http://www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Do You Own a California Vacant Home? It Might Be a Housing Crisis Issue.

Should empty homes be taxed?

The City of Los Angeles, and many other cities, have been looking into this issue for years. The Alliance of Californians for Community Empowerment (ACCE) issued a report stating the City has more than 46,000 units in "non-market vacancy".  In 2020 another report said there were between 80,000 to 100,000 empty units throughout the city.  Housing advocates are often interested in the issue in order to house the homeless or "unhoused", but regardless of the target market, having so many units off the open market and unavailable to potentially qualified lessees/residents is a housing problem. And now many cities are thinking of taxing those properties. And, the California Association of Realtors estimated that around 1.2 million units, apartments and single-family homes may sit vacant around California. 

This is a kind of proposition that is usually easier said than done, but San Francisco, Santa Cruz, Berkeley have all worked towards a ballot proposition, while West Hollywood may discuss it next year. 

Also, Kate Harrison, Berkeley Vice Mayor, "cited a report in San Francisco finding vacancies are disproportionately in multi-family apartment complexes and in areas with older housing stock and higher rates of new construction. She said this suggests property owners are holding older units vacant to capitalize on new construction, and she wants a tax to send a message to these owners and “out of towners” who let property sit empty in a city they may not live in."

And, "The extraordinary gap between the housing needs of residents and the availability of housing can only be bridged through the use of numerous policy interventions, including a vacancy tax intended to incentivize owners of housing property to bring units back on the market and discourage speculation," Berkeley city staff wrote.

Vacant properties attract nuisance as well. It's better for cities and neighborhoods to have occupied homes, but is forcing property owners via a tax going to achieve the desired result?  In San Francisco, it could bring 4500 units back on the market with their proposed tax scheduled to launch in 2024. If it's successful, it would continue to pave the way for other cities.
 

Julia Huntsman, REALTOR, Broker | http://www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996