SPRING GENERATED SMALL UPTICK IN SIGNED CONTRACTS
Newly signed contracts rose month-over-month for the fourth time as new listings expanded for the third time in four months. There was a small uptrend of people purchasing homes in April. And the good news is that inventory levels for homes between $2M to $4.99M were up approx 2% in April 2023 year over year, but inventory levels for homes under $2M and above $5M are down significantly year over year.
That being said, there is a pool of home buyers that are still eager to find a home, even with the increased mortgage rates. They have to navigate this complex and competitive market and that’s where a great real estate agent with the right home buying strategy, market intelligence and a good network is key.
Tight inventory has always been common in LA but it is exacerbated by homeowners who are sitting on the sidelines, scared off by the steep prices and mortgage rates that they would face as buyers. Homeowners with low-rate mortgages are delaying the decision to sell until market conditions change. Coupled with the “Mansion” ULA Tax for homes above $5M propelling homeowners to stay put so they don’t have to pay the tax.
Even as the market cooled in 2022, the new listing volume was actually still slim. It’s this supply-demand dynamic that we’re seeing play out in 2023. There are very few sellers so there are enough buyers available. Despite mortgage payments being much higher, home prices haven’t come down.
According to a NY Times Article: “Homeowners seem to be pretty patient right now,” said Maegan Sherlock, a senior research analyst at John Burns. “Until things get a little better, those people are going to hold out,” she added. For full NY Times Article, click here
The April 2023 Elliman New Signed Contracts Report for California produced in conjunction with Miller Samuel with comprehensive and objective market insight. This market report provides access to timely information which is a vital resource in a market that is constantly changing.
For other articles on current real estate market, check out "The Unusual Supply and Demand Dynamics of Today’s Housing Market” by Mike Simonsen, founder and president of real estate analytics firm Altos Research.