Report puts hot LA residential market on plateau
More than 1,800 sales, median eases slightly in key swath during third quarter
L.A.’s residential market is still hot.
But not quite as hot.
Just over 1,800 sales closed from Downtown to the Westside in the third quarter, according to a report released this week.
That’s the second-highest total in the 17 years since appraiser Jonathan Miller began tracking data –– but it’s also a second-place finish to the record set in the previous quarter.
“I think my word of the day would be ‘plateauing,’” said Miller, of New York-based Miller Samuel Inc. “The market is extremely elevated in terms of activity, but we’re not seeing the same rocketship of growth that the market has been seeing over the last year and a half.”
In the second quarter, 2,093 sales closed. Over the past couple decades, the historical average for third quarter sales is around 1500, Miller said.
The plateau in volume doesn’t mean there’s less pressure on prospective buyers: Around a third of single family sales closed above asking price in the third quarter, another near-record that reflects the current market’s persistently high demand.
The months of frenetic buying has left inventory pinched, although not as severely in L.A. as some other markets around the country, Miller added.
Bidding wars remain common across the chunk of the market the report examines –– a swatch that spreads west from the city’s center, taking in high-end submarkets from Los Feliz to Beverly Hills, with mid-range and gentrified areas such as Mt. Washington and Echo Park in the mix.
“So whether the market is red hot or white hot, it’s still tight,” Miller said.
The median sale price for single family homes and condos in the area covered by the study for the third quarter was $1.73 million, barely down from the second quarter’s record-high of $1.75 million. The recent hot streak is apparent in light of both of those figures topping the third quarter of 2020, when the country’s broad economic recovery and the effects of the pandemic were spurring a market surge, pushing the median up to $1.67 million.
In the new report, L.A.’s most expensive submarket was Beverly Hills, where the median price of a single-family home was $7.38 million — 12% higher than for the second quarter.
In Malibu Beach, which ranked second most expensive, the median single family sale price was $6.1 million, which represented a sharp decline from the second quarter. That tracks with Westside and Downtown luxury sales more broadly, with the median price for the segment dropping from $13.4 million to $12.5 million between the second and third quarters. Luxury inventory also fell moderately from the previous quarter and sharply compared to a year earlier.
Statewide, analysts predict a moderately cooling market for 2022: One recent report from the California Association of Realtors forecast 5% fewer sales next year compared to this year’s total. That report also predicted a 5% hike in the statewide median sale price. Between 2020 and 2021, the increase is expected to be 20%.