It is our pleasure to bring you the Compass 2021 Q2 Real Estate Market Report. It provides key data and a current perspective on the LA real estate market.
As Los Angeles moved through Q2 the market set records with sales activity and home prices. Median home prices in the region have risen by double digits for 10 consecutive months. Inventory constraints continue to result in multiple offers and bidding wars as standard operating procedure.
Despite all of this tremendous growth, rumors of a potential slowdown in demand have been circulating as we head into the second half of the year.
Economist Lawrence Yun, with National Association of REALTORS®, projects a temporary, slight leveling off of prices later this year, but no dramatic declines. Still, this could fuel a wave of “second chance buyers” who have been priced out of the current market.
Driving this potential market correction is a slight increase in inventory and mortgage rates that is projected to happen now through 2022. Despite lumber and labor shortages, housing starts are up 50% from 2019. Additionally, as forbearance programs phase out, more homes are expected to hit the market.
While the current real estate data looks shockingly good, it’s important to put into perspective that these numbers are being compared to Q2 2020, the height of the pandemic, when real state sales had plunged and price growth slowed. Now that the housing market has roared back to life, spurred by record low mortgage rates and pent up demand, a more accurate analysis would be to compare current numbers to pre-pandemic years.
When we look at data from 2018 & 2019, the number of home sales entering escrow is still well above these time periods, meaning yes, the market is currently very HOT! But, with all these factors at play a healthier market may finally be on the horizon, even if it doesn’t come with a discount.
Q2 Market Highlights:
Westside second-quarter home sales increased by 222% and the average sold price increase 19.98% to $1,584,484.
Prices fell by 23% for single-family homes in the high-net-worth areas of Bel Air/Holmby Hills and Beverly Hills
Housing market activity in the Coastal Communities continues to be strong especially in Malibu, Marina Del Rey, Santa Monica, and Venice.
Brentwood average sales price for single-family homes increased 13% to $6 million.
Economists forecast interest rates to remain well below 4 percent through 2021.
Our team is here to help you make informed decisions as we make our way through this unprecedented market. As we move into the third quarter with multiple offers, bidding wars and limited inventory, we are adapting to these changes and continue to come up with creative solutions to serve our clients.
If you’re interested in buying or selling this year, please reach out to us so we can go over what options are available to you.
Wishing you a safe and healthy summer ahead!
Lisa Kirshner Properties Team