Coronavirus And Its Impact On The Los Angeles Real Estate Market – July Update
With the coronavirus panedmic continuing to persist in Los Angeles, the real estate market continues to be significantly hampered in comparison to prior years. As we discussed last month, closed sales and median sale price declined in May, while new listings and pending sales were showing signs of recovery. Data this month now confirms that the market continued its recovery in June, with closed sales, median sale price, new listings, and pending sales all increasing in June. However, the market is far from recovered, with activity remaining significantly below prior years.
How Coronavirus Impacted The Market And Sales In June
Last month, we predicted that June would see greater activity than prior months, due to new listings and pending sales increasing in May. The data from June now confirms that to be the case. June is the first month since the beginning of the coronavirus pandemic in which the number of closed sales surpassed the prior month. This signifies the beginning of recovery and increased buyer confidence. We expect this trend to continue through the remainder of the summer months. Nonetheless, as shown below, the number of closed sales in June remains significantly less than prior years.
Similarly, the median sale price per month is showing signs of recovery. As with closed sales per month, June is the first month since the pandemic in which the median sale price per month has increased. Prices remain above where they were at the same time last year. Again, this indicates that recovery is beginning, and increased consumer confidence.
What June’s Data Tells Us About July
June’s data regarding new listings and pending sales confirms that the recovery will likely continue into July. As shown below, the number of new listings per month increased in June in comparison to May. This means increased supply and more options for buyers. Again, a large gap remains in comparison to prior years, but the trend is promising.
Pending sales data similarly shows increased confidence of buyers in comparison to prior months, but confidence remains significantly lower in comparison to prior years. Despite the significant dip in pending sales in March and April, May and June pending sales activity shows an increase in volume of transactions. This will of course translate to even more closed sales in July. The graph below shows historical pending sales per month in Los Angeles County.
Predictions For The Future Of The Los Angeles Real Estate Market
The first few months after the beginning of the coronavirus pandemic, starting in March, showed a jump in “months’ supply of inventory”, which is the measure of how many months it would take for the current inventory of homes on the market to sell given the current pace of home sales. That metric now appears to be back to “normal”, as supply and demand have appeared to reach a level of normalization. This is again reflective of increased buyer confidence, as indicated by the increase in the number of pending sales above. The graph showing months’ supply of inventory is shown below.
Overall, the data from June again appears to confirm our prediction that although the coronavirus and stay-at-home orders created an initial decline in the market, recovery is now underway. Buyers and sellers are now beginning to re-enter the market, which is approaching a state of “back to normal”. Still, the number of closed sales, new listings, and pending sales remains significantly below levels during comparable times in prior years, but the trend is positive and is approaching “normal”. We predict this trend will continue into July and August, and the winter months may see more activity than prior years due to the backlog resulting from decreased activity earlier in the year.
For more information on how Esquire Real Estate Brokerage, Inc. can help you in the Los Angeles real estate market, feel free to give us a call at 213-973-9439 or send us an email at info@esquirereb.com.
