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Home prices are forecast to decline 8.8 percent in Los Angeles

Home prices are forecast to decline 8.8 percent in Los Angeles and around the state this year, according to the California Association of Realtors, but that’s not a big reason to cheer for those looking to enter the home-buying market.

Median home prices remain unaffordable for about 80 percent of Californians, according to a recent statement from the residential broker trade group.

In a study released last week, CAR found that only 17 percent of Californians could afford a median priced home of $790,000 in the fourth quarter of 2022. The number of Californians able to afford a median priced home was 18 percent in the third quarter of 2022 and 25 percent in the fourth quarter of 2021.

A median income of $201,200 was required to make monthly payments of $5,000 for principal, interest and taxes on a 30-year fixed-rate mortgage at a 6.8 percent interest rate, according to study authors.

The outlook for the condominium market was better. About 26 percent of California home buyers were able to purchase a $610,000 median priced condo. A minimum income of more than $155,000 was required to make a monthly payment of $3,880.

Jordan Levine, CAR’s chief economist, does not think California and Los Angeles’ housing market is going to change much for the rest of 2023. The biggest reason was rooted in a basic supply and demand issue.

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“We can expect some modest price adjustment in L.A.,” Levine told TRD. “Even with business cycles that go up and down, we have an economy that is so underhoused, it means affordability is a persistent challenge.”

Inventory has long been tight for many areas of Los Angeles and surrounding markets. However, the bonanza market of 2021 and 2022 has kept expectations high for many sellers, said Cyrus Mohseni, founder of The Keystone Team, a brokerage based in Huntington Beach which has closed deals from North San Diego County to West Los Angeles.

Mohseni said residential agents are being pulled in two directions in this market.

“You have a bunch of sellers who want the value of the last two years. You have a bunch of buyers who can’t pay the value of the past two years because of interest rate hikes,” he explained.

But there is opportunity in a tight market. Mohseni said that many homes are priced incorrectly, and their listings expire. He recommends Keystone Team agents dig through MLS for expired listings. Contact sellers of the expired listings and pitch them on listing their homes at an ask more in tune with the market.

Mohseni forecast an increasing number of California agents will drop out of the market because it is not as easy to close a deal as it was in the recent bonanza market. But those agents who remain will be able to take market share from those who exit.

Home Sales Surged 14.5% in February

Existing-Home Sales Surged 14.5% in February, Ending 12-Month Streak of Declines
Largest monthly percentage increase since July 2020
March 21, 2023Media Contact: Troy Green 202-383-1042
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Key Highlights
Existing-home sales jumped 14.5% in February to a seasonally adjusted annual rate of 4.58 million, snapping a 12-month slide and representing the largest monthly percentage increase since July 2020 (+22.4%). Compared to one year ago, however, sales retreated 22.6%.
The median existing-home sales price decreased 0.2% from the previous year to $363,000.
The inventory of unsold existing homes was unchanged from the prior month at 980,000 at the end of February, or the equivalent of 2.6 months’ supply at the current monthly sales pace.
WASHINGTON (March 21, 2023) – Existing-home sales reversed a 12-month slide in February, registering the largest monthly percentage increase since July 2020, according to the National Association of REALTORS®. Month-over-month sales rose in all four major U.S. regions. All regions posted year-over-year declines.

Total existing-home sales,1 https://www.nar.realtor/existing-home-sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – vaulted 14.5% from January to a seasonally adjusted annual rate of 4.58 million in February. Year-over-year, sales fell 22.6% (down from 5.92 million in February 2022).

“Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines,” said NAR Chief Economist Lawrence Yun. “Moreover, we’re seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs.”

Total housing inventory2 registered at the end of February was 980,000 units, identical to January and up 15.3% from one year ago (850,000). Unsold inventory sits at a 2.6-month supply at the current sales pace, down 10.3% from January but up from 1.7 months in February 2022.

“Inventory levels are still at historic lows,” Yun added. “Consequently, multiple offers are returning on a good number of properties.”

The median existing-home price3 for all housing types in February was $363,000, a decline of 0.2% from February 2022 ($363,700), as prices climbed in the Midwest and South yet waned in the Northeast and West. This ends a streak of 131 consecutive months of year-over-year increases, the longest on record.

Properties typically remained on the market for 34 days in February, up from 33 days in January and 18 days in February 2022. Fifty-seven percent of homes sold in February were on the market for less than a month.

First-time buyers were responsible for 27% of sales in February, down from 31% in January and 29% in February 2022. NAR’s 2022 Profile of Home Buyers and Sellers – released in November 20224 – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.

All-cash sales accounted for 28% of transactions in February, down from 29% in January but up from 25% in February 2022.

Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in February, up from 16% in January but down from 19% in February 2022.

Distressed sales5 – foreclosures and short sales – represented 2% of sales in February, nearly identical to last month and one year ago.

According to Freddie Mac, the 30-year fixed-rate mortgage(link is external) averaged 6.60% as of March 16. That’s down from 6.73% from the previous week but up from 4.16% one year ago.

Single-family and Condo/Co-op Sales
Single-family home sales soared to a seasonally adjusted annual rate of 4.14 million in February, up 15.3% from 3.59 million in January but down 21.4% from the previous year. The median existing single-family home price was $367,500 in February, down 0.7% from February 2022.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 440,000 units in February, up from 410,000 in January but down 32.3% from one year ago. The median existing condo price was $321,000 in February, an annual increase of 2.5%.

“Owning a home provides a path to long-term financial security and is a vehicle by which to transfer wealth to future generations,” said NAR President Kenny Parcell, a REALTOR® from Spanish Fork, Utah, and broker-owner of Equity Real Estate Utah. “REALTORS® deliver expert guidance, objectivity and professionalism to consumers during the complex process of purchasing a home.”

Regional Breakdown
Existing-home sales in the Northeast improved 4.0% from January to an annual rate of 520,000 in February, down 25.7% from February 2022. The median price in the Northeast was $366,100, down 4.5% from the previous year.

In the Midwest, existing-home sales grew 13.5% from the previous month to an annual rate of 1.09 million in February, declining 18.7% from one year ago. The median price in the Midwest was $261,200, up 5.0% from February 2022.

Existing-home sales in the South rebounded 15.9% in February from January to an annual rate of 2.11 million, a 21.3% decrease from the prior year. The median price in the South was $342,000, an increase of 2.7% from one year ago.

In the West, existing-home sales rocketed 19.4% in February from the prior month to an annual rate of 860,000, down 28.3% from the previous year. The median price in the West was $541,100, down 5.6% from February 2022.

The National Association of REALTORS® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics.

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The Riskiest Housing Markets, Where Home Prices Could Fall the Most

The Riskiest Housing Markets, Where Home Prices Could Fall the Most By Clare Trapasso
Sep 15, 2022

With the housing market correction well underway, the big question on the minds of just about everyone is if home prices are poised to fall. Mortgage rates are rising, fears are mounting that the nation will slip into a recession, and inflation continues to soar.

Something has to give, right?

However, when it comes to real estate, it’s all about location. New Jersey, Illinois, and inland California had the most at-risk real estate markets if the nation slips into an economic downturn, according to real estate data firm ATTOM. New York City and Chicago were particularly susceptible.

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Meanwhile, the South and Midwest were the least vulnerable.

“Most of the markets that are most at risk tend to have higher unemployment and tend to be the least affordable markets,” says Rick Sharga, executive vice president of market intelligence at ATTOM. “We’re not suggesting any of these metros is in imminent danger of a housing crash. In the event of a recession, these metro areas would be the most likely to have some fallout.”

To come up with the list, ATTOM assessed the vulnerability of 575 U.S. counties by looking at the percentage of homes facing a potential foreclosure; the share of homes with mortgage balances that were higher than property values; local unemployment; and the percentage of average local wages needed to afford homeownership expenses. Counties had to have enough data to analyze.

The analysis assumes that the Federal Reserve’s determination to continue raising rates to combat inflation, along with other worrying economic factors, will push the nation into a recession. If that happens, some parts of the country are likely to fare better and worse than others, similar to what was experienced during the Great Recession.

Nearly two-thirds of the 50 most at-risk counties were in the Chicago, New York City, and Philadelphia metropolitan areas and in inland California. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)

“When you look at the top 10 to 15 most vulnerable markets, they tend to be in places like the New York metro and the Chicago metro, where you have limited affordability and relatively high unemployment,” says Sharga.

On the other hand, at least half of the 50 least vulnerable markets were in the South and 14 were located in the Midwest. Tennessee, Wisconsin, and Arkansas had the most markets that were deemed safer.

“In the South, homes are less expensive,” says Sharga. “And many of the people moving into the South have been moving out of high-priced, high-taxed states and looking for more affordable properties [to help buffer these markets]. They have very, very strong employment as well.”

#Silver Lake Realtor #Los Feliz Realtor

Home Price Growth Has Just Showed a Clear Sign It’s Reaching Its Peak

Home Price Growth Has Just Showed a Clear Sign It’s Reaching Its Peak—Here’s Proof By Judy Dutton
Sep 15, 2022

It’s hard to not feel bad today for homebuyers, who are being simultaneously squeezed by rising mortgage rates and ever-higher home prices. But at long last, some relief seems to be on the horizon.

“How’s the Housing Market This Week?” is our regular column in which we look at real estate statistics. For the week ending Sept. 10, they indicate that the runaway real estate inflation that homebuyers have been struggling to keep up with is slowing down—if just by a bit.

“Although home prices continue to register double-digit growth relative to one year ago, the rate took a notable step back this week to the lowest pace since January,” notes Realtor.com® Chief Economist Danielle Hale in her analysis.

Here are the latest figures and what they mean for both homebuyers and sellers so that all can stay on top of today’s fast-changing market.

Weekly Housing Trends – latest
Home prices are still growing, but they’re definitely slowing
In August, home prices hovered at a national median of $435,000. And prices are still rising—by 11.7% for the week ending Sept. 10 compared with this same week last year.

While that’s the 39th straight week of double-digit growth, the glimmer of good news for buyers is that this week’s rate does mark the lowest level seen since January. The home price growth in previous weeks clocked in even higher—in the 15%–16% range throughout July, followed by the 13%–15% range in August. In this context, this latest week’s 11.7% price growth doesn’t seem so bad.

Plus, now that summer’s homebuying frenzy is over, real estate prices are already sloping downward along with dwindling temperatures.

“Home prices typically decline as we move into the second half of the year, one of the key seasonal trends that help make fall the best time to buy a home,” says Hale.

In fact, statistics suggest that the very best time to buy a house in the entire year is the last week of September, when prices are slated to be $20,000 lower than June’s all-time high of $450,000.

In other words, home shoppers who want to double down on their efforts right when the cards are heavily stacked in their favor had best hit those open houses hard right now before this prime window of opportunity closes.

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New real estate listings dropped a lot
For the week ending Sept. 10, the number of new home sellers putting their properties on the market dropped by 13% compared with this same week last year. That’s the 10th straight week of year-over-year declines, and a double-digit drop at that.

Clearly, “sellers are less optimistic about conditions compared to a year ago, which is a likely factor behind the scarcer new listings trend,” says Hale.

Nonetheless, overall housing inventory—a combination of these fresh listings and stale ones still on the market that have yet to find a buyer—is strong, up by 27% over last year.

“While the number of newly listed options was smaller, today’s shoppers have more than five homes to consider for every four they had at this time a year ago,” Hale explains.

Home sales are slowing
Since the COVID-19 pandemic, the pace of home sales has sped up, with median days on the market in August clocking in at a mere 34—22 days faster than this same month from 2017 to 2019.

Yet finally, this frenetic rush is mellowing. For the week ending Sept. 10, properties spent six extra days on the market compared with a year earlier. That’s the seventh straight week of homes sticking around for sale longer than last year.

Still, Hale reminds us, “relative to pre-pandemic, shoppers need to make faster decisions.” And the pace of sales will range widely based on where the house hunt is taking place.

Homes in the country’s hottest markets—currently in the Northeast and Midwest, which offer affordability—will still disappear quickly. (For example, listings in the hottest market of all, Manchester, NH, linger a mere 23 days before being snapped up.)

“And with more shoppers than ever before willing to look across state lines for a home, affordable areas are likely to see ongoing demand,” adds Hale.

Mortgage rates broke the 6% mark
According to Freddie Mac, for the week ending Sept. 15, the average 30-year fixed mortgage rate increased to 6.02%, up from the previous week’s 5.89%.

And since many are bracing for the Federal Reserve to hike its short-term interest rates at its meeting next week to combat stubborn inflation, mortgage rates may continue rising, making this fall’s housing market more of a mixed bag of good and bad news for buyers.

“Higher mortgage rates combined with still-high home prices are making it challenging for homebuyers as we head into what historically has been the best time of the year to find a better deal,” Realtor.com Senior Economist George Ratiu notes. “Something has to give.”

days on markethome inventoryhome priceshousing marketWeekly Housing Market Update

Affordable Housing in California Now Routinely Tops $1 Million

Affordable Housing in California Now Routinely Tops $1 Million per Apartment to BuildwordPublished 2 months ago on June 21, 2022By NewsArtist rendering shows a proposed affordable housing complex at Shaw and Glenn Ave. in Fresno. (Image: UPholding)
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More than half a dozen affordable housing projects in California are costing more than $1 million per apartment to build, a record-breaking sum that makes it harder to house the growing numbers of low-income Californians who need help paying rent, a review of state data has found.

The exorbitant price tags mean that taxpayers are subsidizing fewer apartments than they otherwise could while waiting lists of renters needing affordable housing continue to grow.

A key driver of the increases is labor and material prices, which have soared because of inflation, supply-chain problems and worker shortages during the COVID-19 pandemic. But numerous factors within the control of state and local governments also to blame for the high cost of building affordable housing in California.

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