The Los Angeles residential market posted modest gains in the third quarter, with single-digit jumps in pricing and velocity, respectively. The gains come amid a prolonged period of low housing inventory, which has pushed prices to record highs.
The median price of a home in the Westside and Downtown areas of L.A. was exactly $1 million in the third quarter, up 5.3 percent from the same period last year, according to a new report by brokerage Douglas Elliman. The average price per square foot was $776, up 6.7 percent from last year.
Elliman executive Colin Keenan attributed the rise to a persistent lack of inventory, noting that homes are sitting on the market for an average of just three months at a time. That’s about double the absorption rate seen in comparable markets such as New York.
“Buyers can’t act like they’re window shopping or they’ll be left out in the cold,” he said. “The pace of sales is very high and the inventory is just not matching up.”
Jonathan Miller, who prepared the report for Elliman, agreed: “While it’s soft at the top, the pace of the market is unbelievable,” he said.
The biggest spike in pricing was for two-bedroom homes, which traded for an average of 14.6 percent more than they did in the third quarter of 2015, the report shows. Prices for homes with five or more bedrooms remained flat.
Single-family homes in Santa Monica saw the greatest rise in prices year-over-year compared to other areas, trading for a whopping 23.5 percent premium over last year.