New listings in June take a big year-over-year hit in LA County
While month-over-month figures show stability in the market
By Andrew Asch
Single family home listings in Los Angeles County in the month of June didn’t look so bad compared with May, but when zooming out to how they fared versus the same period last year, the dip is startling.
There was about a 41 percent drop year-over-year (2,096 versus 3,531), indicating the inventory crunch this year is much more severe than last year, even though there is still a frenzied demand from buyers, according to a recently published Douglas Elliman report.
In tandem with fewer offerings, signed contracts also saw a double-digit decline of 12 percent during the same June year-over-year comparison (2,392 versus 2,744).
Such steep year-over-year declines should normalize after August, said Jonathan Miller, the author of the Elliman report. And though the report does not track pricing, the decline in new listings is a forecast to keep pricing relatively stable in Los Angeles County, Miller said.
Stable month-over-month figures could be an indicator that the residential real estate frenzy that began during the pandemic is calming down. And there are forces at play causing the slowdown.
For instance, high interest rates are having a direct impact on buyers, and could be making potential sellers anxious as they may need to leverage their next move for a higher price.
“It’s difficult to downgrade now,” said Beverly Hills real estate agent Tim Gavin, who is a cofounder of Coldwell Banker Realty’s The Healey Gavin Group. “If you lose your job, you can’t downgrade from a $2 million home, with a 3 percent to 3.5 percent mortgage rate, to a $1 million home with a 7 percent mortgage rate. It’s inhibiting inventory.”
Gavin, however, noted that homes are selling. “There are still people who need to buy homes. They are biting the bullet today with hopes of refinancing later.”
Via The Real Deal