May 26, 2020
9 weeks into shelter in place and summer is right around the corner. Are we are seeing some signs of normalcy and green shoots in the housing market? Well, it depends on the price point, the location and the condition of the home.
The single family market under $3M is strong on the westside of Los Angeles and SFR under $2M is very competitive. We are still seeing multiple offers when an updated home on a great street hits the market. Keep in mind, there was not much inventory at the entry market pre-covid and when sellers withdrew listings in March and more sellers postponed plans to list their homes the housing squeeze became palpable. This is Compounded by the Sub 4% 30 Year interest rates and sub 3% adjustable loans.
It seems above $3M the market is still slow and there hasn’t been many trades. That said, over the past few weeks there has been a clear uptick in showing requests and buyer interest in the middle market ($3M-$10M) and the high end ($10M+) and a $34M home in Beverly Park, a $15M in Brentwood Park and a $15M home in Bel-Air all went under contract in May. There’s been 27 SFR sales over $3M in May so far. There was 65 closed sales over $3M in the MLS for all of May last year and we have 23 sales over $3M in the MLS with a week left in the month. Transactions are down about 50 percent.
It’s still too early to assess any price adjustments. Overall, we are seeing prices hold at the under $3M level and price adjustments o Average 5-7% in the over $3M depending on the location and price. In the next 60 days we will see the new comps for the houses in escrow which will give us better sense of pricing adjustments.