Tag: property values

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Downtown Los Angeles Real Estate Market Report December 2023

L.A. Navigating Through a Landscape of Persistent High Prices, Economic Stagnation

Home Prices Remain High as Economy Stagnates

REAL ESTATE NEWS (Los Angeles) — The real estate market in December 2023 presented a curious scenario: home prices holding steady despite a backdrop of fewer listings, longer sales periods, and declining total sales volume. This phenomenon can largely be attributed to the persistent inflation affecting the broader economy. Let’s explore how inflation played a role in shaping the Downtown L.A. real estate market during this time.

The Influence of Inflation

Economic Backdrop

Inflation, a widespread increase in prices and cost of living, has a multifaceted impact on real estate markets. In Downtown L.A., as in many urban centers, inflation contributed to maintaining property values despite a slowdown in sales activity.

The Cost of Holding Property

For homeowners, persistent inflation often translates to higher costs associated with maintaining a property, including utilities, repairs, and property taxes. This can create a threshold for how low they are willing to go when setting sale prices, thereby contributing to steadier home prices even when market activity suggests a potential for decline.

Investment Perspective

Real estate is traditionally viewed as a hedge against inflation. During periods of high inflation, investors and homeowners alike tend to hold onto real estate assets, anticipating that their value will at least keep pace with the rising cost of living. This mindset can contribute to fewer listings and stable or increasing property prices.

Market Dynamics in December 2023

Fewer Listings, Steady Prices

With fewer homeowners willing to sell, partly due to the inflationary context, the supply in the Downtown L.A. market was limited. This scarcity can help sustain prices as buyers have fewer options to choose from, even in a market where overall activity is lower.

Longer Sales Periods

The increase in average days on market indicates a buyer’s market where buyers are more deliberate in their purchasing decisions, possibly due to inflated living costs and economic uncertainty. However, this doesn’t necessarily lead to reduced prices, as sellers hold firm, influenced by the inflationary pressures on their own financial situations.

Declining Total Sales Volume

The reduction in sales volume reflects a market where transactions are less frequent but doesn’t necessarily impact the prices of transactions that do occur. In an inflationary environment, the value of each sale might hold or even increase, compensating for the lower number of transactions.

Implications for Stakeholders

For Buyers

Buyers in this market may find themselves facing steady or slightly increased prices, despite the slower market. It’s essential to be aware of inflation’s impact on mortgage rates and overall affordability.

For Sellers

Sellers might need to balance the desire for optimal pricing with the realities of a slower market. Understanding how inflation impacts buyers’ purchasing power can help in setting realistic prices.

For Real Estate Professionals

Agents and advisors need to navigate these complexities, offering insights into how inflation impacts both sides of a transaction and advising clients accordingly.

Stagflation Continues

The Downtown L.A. real estate market in December 2023 stood as a testament to the nuanced relationship between real estate and broader economic trends, particularly inflation. While the market experienced fewer sales and longer selling periods, home prices remained resilient, underscoring the role of inflation in maintaining property values. As urban real estate continues to evolve, understanding these economic interplays becomes crucial for anyone engaged in this dynamic market.

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Copyright © This free information provided courtesy L.A. Loft Blog with information provided by Corey Chambers, Broker DRE 01889449. We are not associated with the seller, homeowner’s association or developer. For more information, contact 213-880-9910 or visit LALoftBlog.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Text and photos created or modified by artificial intelligence. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.

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Downtown Los Angeles Real Estate Market November 2023

REAL ESTATE NEWS — The Downtown L.A. real estate market for condos and co-ops in November 2023 exhibits significant differences compared to the same period in 2022. Here’s an analysis, comparison, and contrast of key metrics:

  1. Number of Listings: There was a decrease in the number of listings from 23 in November 2022 to 16 in November 2023. This suggests a tighter market with fewer properties available for sale.
  2. Days on Market (DOM): The average and median DOM increased notably from 44 and 29 days in 2022 to 86 and 68 days in 2023, respectively. This indicates that properties stayed on the market longer before being sold in 2023.
  3. Pricing Trends:
    • Low Price: The low-end prices dropped from $385,000 in 2022 to $299,000 in 2023.
    • Median Price: The median price decreased slightly from $695,000 in 2022 to $530,000 in 2023.
    • High Price: The high-end market also saw a decrease from $1,599,900 in 2022 to $965,000 in 2023.
  4. Average Price and Square Footage:
    • Average Price: The overall average price saw a decrease from $777,426 in 2022 to $561,743 in 2023.
    • Average Price per Square Foot: The average price per square foot decreased from $740.93 in 2022 to $602.56 in 2023.
    • Average Square Footage: Remained constant at 915 square feet for both years.
  5. Lot Size (LSZ): The average and median lot size remained roughly the same, but the average price per lot size decreased from $18.29 per LSZ in 2022 to $12.72 per LSZ in 2023.
  6. Sales Performance:
    • Average SP/Avg. LP (Selling Price vs. Listing Price): There was a slight decrease in the average selling price compared to the listing price, from 98.64% in 2022 to 97.76% in 2023.
    • Total Volume: There was a significant decrease in total sales volume, from $17,880,800 in 2022 to $8,987,900 in 2023.
  7. DOM and Average % of List Price Received on Solds Statistics:
    • There was a more even distribution of sales across different DOM ranges in 2023, with a notable portion (37.5%) selling after 120+ days.
    • The percentage of the list price received was relatively high and consistent across different DOM ranges in both years.

Overall Summary:

  • The Downtown Los Angeles condo and co-op market in November 2023 was characterized by fewer listings, longer sales durations, lower prices across the spectrum, and a significant drop in total sales volume compared to November 2022.
  • The decrease in prices and increase in DOM might indicate a buyer’s market in 2023, where buyers had more negotiating power due to less competition and a greater supply of properties available for longer periods.

While October showed a notable improvement over the same month last year, suggesting a potential upturn, it now appears that this uptick was an anomaly, with the overall trend still indicating a falling real estate market for the urban L.A. city center. Most home prices are holding strong due to overall inflation concerns.

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Copyright © This free information provided courtesy L.A. Loft Blog with information provided by Corey Chambers, Broker DRE 01889449. We are not associated with the seller, homeowner’s association or developer. For more information, contact 213-880-9910 or visit LALoftBlog.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Text and photos created or modified by artificial intelligence. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.