While our economy is struggling slowly uphill, real estate markets are on a much swifter rebound. Contract signings for existing homes increased 5.9% over the past two months, which is an increase from last year.
Since the rise of COVID-19, a current trend in the real estate market is home buyers looking for a multi-purpose sanctuary: more space, home offices, amenities, and an indoor-outdoor living experience as people are spending more and more time from home. With a tight supply of existing homes, sales of new homes have seen a recent noticeable gain.
Los Angeles Real Estate Inventory
Realtor.com’s housing recovery index rose for the 6th consecutive week to a new high for 2020, showing that demand has continued to rise through August and looking up for September.
This past weeks inventory data shows that both inventory and new listings have dropped, driving prices 10% higher compared to what it was last year. At this pace, housing markets are facing affordability concerns.
Los Angeles Real Estate Median List Price
The biggest challenge is that sellers are facing the same minimal choices as first time buyers as there are simply not enough homes that meet people’s current needs on the market. This creates a Catch-22 as even though there’s demand, many sellers are struggling to find a suitable buyer.
On the upside- mortgage rates remain below 3 percent which is low. However, even with these low rates, mortgage application rates have recently dropped mostly with the decline on refinancing. Purchase applications have rose as buyers are focused on the certainty of a predictable monthly payment.
That wraps up our real estate market update!
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Market update info by Realtor.com and charts provided by our friends at AltosResearch.com
