“Massive release of demand”: LA County June home sales surge
Sales were up 40% on single-family homes and condos, attributed to pent-up demand
Los Angeles County home sales surged in June as private showings returned without restrictions and the economy — briefly, it turns out — flew open its doors.
There were 3,868 contracts signed to buy single-family homes last month in the county, a 40 percent climb from May, according to report from Douglas Elliman and appraiser Miller Samuel.
Contracts to buy condos increased at an even higher rate. There were 841 condo sales recorded in L.A. County, a 66 percent leap from a month earlier, perhaps a reassuring sign for investors and developers advocating for vertical living despite the challenges coronavirus has created.
“Condo sales are no worse than single-family in Southern California or any other market,” said Jonathan Miller, president and CEO of Miller Samuel and the report’s author.
The June sales boost included low and high-end properties. Among the highlights was billionaire Elon Musk’s successful turn on the market: Last month, he sold five of the six Bel Air homes he listed, including four to spec home developer Ardie Tavangarian.
June sales were down year-over-year, with home contracts signed 13 percent below what they were in 2019, and condo transactions down 10 percent.
Part of the decline could be attributed to the residential market not yet fully reopening. While private showings are back, open houses and caravan rides that are a staple of Sundays and Tuesdays on Los Angeles’ west side have not returned.
Still, the numbers could have been much worse, given the doom predicted for the L.A. residential market at the onset of Gov. Gavin Newsom’s shelter-in-place orders in March.
Miller attributed the June bump to pent-up demand from late March and April, a time that is normally the high point for home sales, but not this year due to coronavirus shelter-in-place orders.
“There was a massive release of demand,” Miller said, compared to April when home sale contracts plummeted to 2,334 in L.A. County, and there were just 444 condo deals, easily the lowest of the past 12 months.
“The downturn was caused by the coronavirus-related shutdown,” Miller said. He called the market’s spring swoon a product of “external forces, not economic forces” within residential real estate.
Still, the market remains at the mercy of the virus, he said. The recent resurgence of Covid-19 “adds further uncertainty to the next month or two,” Miller said.