Los Angeles Real Estate Update - Oct/Nov 2024

The median home price in California continued growing for fifteen consecutive months, but at a more moderate pace, and is expected to continue moderating for the rest of year. With prices expected to soften and rates likely to normalize by the end of the year, the fourth quarter is a window of opportunity for homebuyers on the sideline to re-enter the market.

Meanwhile, new home sales last month reached the highest level since May 2023 as new housing markets benefited from low rates in September. However, with rates back to 7% recently, sales momentum in the new housing market will likely slow in the near future. On a brighter note, consumer short-term inflation expectations in September continued to stay at the lowest level since early 202, which at least offers hopes that rates could gradually come down in the coming months

Analyzing current Los Angeles housing market trends and economic indicators, we can make some educated guesses about what's on the horizon.

Continued, but moderate, price growth: While the days of double-digit price increases are likely behind us (for now, at least), I anticipate that home values in Los Angeles will continue to rise, albeit at a more sustainable pace.
A more balanced market: The slight cooling in sales volume and price appreciation could be early signs of a shift towards a more balanced market, offering opportunities for both buyers and sellers.
Inventory Shortages: The persistent shortage of available homes for sale continues to play a critical role in sustaining elevated home prices. With fewer listings, competition remains tight, pushing prices higher for the limited stock.
Shifts in Buyer Preferences: Demographic shifts and changing lifestyles have led buyers to seek different types of properties, including those with more space for remote work or homes located in suburban areas, enhancing their quality of life amidst evolving economic factors.
Economic Uncertainties: Current economic conditions, including inflationary pressures and concerns about a potential recession, have led buyers to adopt a more cautious stance. Coupled with changing consumer confidence, many are analyzing their financial situations before committing to a home purchase
Future Projections: As we progress through 2024, the continued interplay of interest rates, inventory levels, and economic conditions will dictate future market behavior. Analysts predict that while price growth may level off, sustained demand could prevent a substantial downturn.