Covid And Its Impact On The Los Angeles Real Estate Market – August Update
Now well-into the fifth month of the covid pandemic, the Los Angeles real estate market is showing signs of returning back to normal. Closed sales are at approximately the same level as one would expect in normal circumstances during this time of the year, and the median sale price is well-above pre-pandemic prices. New listings are also up and back to normal levels, meaning sellers are becoming more comfortable with listing properties despite covid concerns. As we previously predicted, this surge will likely continue into August as the backlog of properties for sale starts to hit the market, and as buyer confidence continues to grow.
How Coronavirus Impacted The Market And Sales In June
June was the first month since the beginning of the coronavirus pandemic that closed sales per month had increased. We predicted that the trend would continue into July. As shown below, closed sales per month increased significantly in July, putting the market at almost the same place it was during the same time of the year in prior years. August will likely see a similar trend as the summer surge continues.
The median price per sale saw a similar surge in July. As with closed sales per month, June was the first month since the pandemic in which the median sale price increased. That trend continued into July, with the median sale price hitting another monthly record. Historically low interest rates have likely contributed significantly to continuing increases in prices. This data indicates the recovery in the real estate market is well under way.
What July’s Data Tells Us About August
As we predicted last month, the increase of new listings per month continued from June into July, once again putting the market at a similar level to the same time in prior years. Similar to the data regarding median sale price and closed sales, the number of new listings per month indicates a return to “normal” in the real estate market. We anticipate that, unlike other years, this trend will continue into August and September due to the backlog of properties that were not listed in prior months.
Interestingly, the number of pending sales decreased in July. This likely foreshadows a slight decrease in closed sales in August. However, with the increase in the number of new listings in July, we expect that August will see an increase in the number of pending sales.
Predictions For The Future Of The Los Angeles Real Estate Market
We appear to have reached a semblance of “normal” after a sudden change in the real estate market at the onset of the coronavirus pandemic. The “months supply of inventory” increased in July, likely due to the decline in the number of pending sales, but it remains within the realm of normalcy. Assuming there is not a second spike in the covid pandemic, it appears that the market is returning back to “normal”, or at least it is returning to the pre-covid market.
Overall, the data appears to confirm our initial prediction that the market would return to normal as of the end of July, and will potentially be followed by an influx of inventory in August as the backlog of inventory comes onto the market. Although the pandemic is far from over, buyers and sellers appear to have reached a certain level of comfort with operating in the real estate market during the covid crisis. It will be particularly interesting to see whether the recovery continues into the end of August and the remainder of 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.
