LA home sales were dropping even before the pandemic struck

Miller Samuel study shows that home deals have been declining for the last year

Los Angeles County homes (Credit: iStock)
Los Angeles County homes (Credit: iStock)

Los Angeles County home sales declined before the coronavirus pandemic and may be headed for another drop.

Those were the findings of a study released Thursday by real estate brokerage Douglas Elliman and appraiser Miller Samuel, which compiled the month-by-month numbers of L.A. County homes put into escrow.

There were 2,772 single-family home contractual deals in May 2020, a 44 percent drop from 4,961 home deals hammered out in May 2019.

Condominium transactions have dropped even more dramatically, with 507 contracts signed in May 2019, a 51 percent fall from 1,029 sales agreed upon 12 months ago.

These drops are not entirely due to the pandemic, which triggered an L.A. ban on physical home showings through much of March and April.

Instead, May 2019 represented a highwater mark for deals, with the number of homes going into escrow declining through the rest of 2019.

“Usually home sales chart out as a two-humped camel with a big hump in spring and a big hump in fall,” said Jonathan Miller, who authored the study. But there was a “downward drift” in the fall of 2019, with, for example, 4,054 home sales reported for September 2019, or a 19 percent drop from the spring.

The decline serves as a contrast to rosier Elliman/Miller Samuel reports that examined downtown and affluent west Los Angeles neighborhoods. The new study treats a home sale in Beverly Hills or Malibu as a data point equal to one in Compton or Lancaster.

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One note of optimism is that single-family home and condo sales are up in May after an April low point, which Miller attributes to coronavirus lockdown orders.

There was a 19 percent spike in overall home sales contracted in May compared to April, when 2,234 deals were struck. The condo market in L.A. County saw 507 deals get signed in May, a 12 percent jump compared to the 444 home sales inked during April.

“People who had been planning and getting ready for three years to buy or sell a home” were largely deterred from doing so in April due to public quarantine measures, Miller noted.

But the uptick is maybe fleeting, particularly since the normally strong spring market was, in effect, “taken off the calendar,” Miller said.

Any sales prohibited from amid shelter-in-place have either happened or will take place soon, the appraiser said.

Another worry is that deals put into contract don’t mean deals finalized, particularly in a recession.

Miller said that during the 2009 Great Recession up to 35 percent of home sales put into contract never closed.