Los Angeles Sees ‘Exceptionally Strong’ Luxury Market
The high-end real estate market in Los Angeles performed “exceptionally strong” during the fourth quarter of 2021, with prices and bidding wars reaching record highs, according to the latest data from Douglas Elliman.
In the fourth quarter, there were 104 closed sales of single-family homes across Los Angeles’s affluent west side neighborhoods priced at or above $8.45 million—the threshold for the luxury segment, which comprises the top 10% of the overall market. The median luxury sales price reached $12.1 million, a 13.2% increase from a year ago and the highest since the brokerage began to track the market in 2004, according to the Douglas Elliman report released Thursday.
Compared to the fourth quarter of 2019, the median prices of Los Angeles luxury single-family homes surged more than 26%.
“Post lockdown, the luxury real estate market in Los Angeles inverted,” said Jonathan Miller, chief executive of real estate appraisal firm Miller Samuel and author of the Douglas Elliman report. “Pre-pandemic, the narrative was that the high-end market was soft, faring worse than the general market.”
Part of the reasons for the high-end market surge during the pandemic was that the richer have more mobility and benefited from a surging stock market, Mr. Miller said.
Thriving demand is reflected in the market share of bidding wars. Nearly one in four houses sold in the fourth quarter achieved a price higher than its last ask, Mr. Miller said.
Accompanying higher prices and bidding wars was “collapsing of inventory,” Mr. Miller said. About 230 luxury homes were available for sale during the fourth quarter, down 32% year over year. At the current pace, the supply can be absorbed in five-and-a-half months, compared to nine months a year ago.