Los Angeles’ pandemic-fueled homebuying rush has boosted the number of “typical” houses valued at $1 million or more.
Zillow data shows 55 cities across L.A. County now fit that bill, up from 38 before the pandemic, according to the Los Angeles Times.
In 2019, only 2 percent of homes in the county sold for more than $100,000 over their asking price. This year, 10 percent of homes have done so.
And $1 million doesn’t go a long way, according to the report. Of the 198 homes that have sold between $1 million and $1.1 million this year, none is more than 3,000 square feet and 25 are less than 1,000 square feet. The median home size in the city is 1,500 square feet.
“When I got into this business, a million-dollar home was a beautiful five-bedroom traditional-style home on a very large lot in a desirable area,” said veteran Sotheby’s International Realty agent Maureen Hollingsworth. “Today, it buys you a two-bedroom on a tiny lot.”
While the countywide median sales price has been on a steady upward trajectory since the pandemic, price growth may now be slowing, according to a recent report.
Low mortgage rates are the silver lining for buyers but they also increase demand in a market with low supply. And that can raise prices.
The monthly cost of a mortgage for a $1 million home today — with 20 percent down and an average rate of 2.88 percent — is around $4,500.
At 2006’s average rate of 6.47 percent, that mortgage would cost around $6,300 per month. At 2018’s average rate of 4.54 percent, that mortgage would cost just under $5,300.
[LAT] — Dennis Lynch