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Residential
Los Angeles

LA ranks near bottom of 2023 residential market forecast

Realtor.com says SoCal market poised for sales slowdown while prices rise slightly

(Getty)
(Getty)

With just weeks to go before the new year, Realtor.com on Thursday published its 2023 housing forecast for the country’s 100 largest metro areas — and L.A. ranks near the bottom.

The website’s model incorporates data from local housing markets and the economy to predict year-over-year overall prices and sales volume for each metro area. The site then combines the two data points to come up with its ranking.

For the L.A.-Long Beach-Anaheim metro area, Realtor.com predicts a 15.8 percent decrease in sales and a 3.2 percent price increase. Those stats placed the SoCal region 94th out of 100, right between greater Tampa and Melbourne, Florida, two markets that, like L.A., had also surged during the pandemic.

Metro areas that ranked near the top of the list tended to be smaller or medium-sized markets that have remained relatively affordable but are seeing increasing demand, particularly as interest rates rise and an affordability crisis continues to plague would-be buyers in high-cost places such as L.A.

The metro areas that topped Realtor.com’s forecast were Hartford, El Paso and Louisville, where the website predicts both sales volume and median prices will rise by between 5 and 9 percent.

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“Many of these areas flew under the radar in the pandemic frenzy,” Danielle Hale, the website’s chief economist, said in a release, “and are now well-positioned to bubble up with solid job prospects without the big-city price tag.”

In much of California — where a few years ago a strong economy and pandemic demand combined with a decades-in-the-making inventory shortage to create one of the world’s hottest residential markets — the story now looks different. Along with L.A.-Long Beach-Anaheim, Realtor.com predicts significant sales cool downs for Riverside-San Bernardino, San Francisco-Oakland-Hayward, Fresno, San Diego, San Jose-Sunnyvale-Santa Clara and Oxnard-Thousand Oaks-Ventura.

All of those metros ranked in the bottom 20; greater San Jose and greater Ventura ranked in the bottom two spots, with year-over-year sales projected to fall by nearly a third.

It’s good news for potential buyers in the state, but not that good: Even as sales in the California metros are projected to drop, Realtor.com predicts prices will still increase slightly.

The ranking comes amid a months-long flurry of legal and political housing developments both statewide and in the city of L.A., where the industry is now bracing for Measure ULA, the recently passed transfer tax that comes into effect in April. Realtor.com also noted that two thirds of would-be buyers in the most expensive metros looked at homes in other metros.

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Los Angeles