MARKET UPDATE: Year-to-Date November 30, 2021
Sadly, the local housing market supply has been drastically below the level of demand for years now. The COVID pandemic along with the unbelievably low interest rates has only worsened this situation. We are like a car running on empty!
In Los Angeles County, the inventory hit an all-time low in April at 7,185 available homes to purchase. It then climbed to 8,702 in mid-August and has dropped substantially since. In fact, it has shed 2,146 homes in the past three months, down an astonishing 25%. In just the past two weeks alone, the inventory plunged by 13%, or 981 homes, the largest drop of the year, and now totals 6,556, establishing a new record low and signaling the start to the Holiday Market when both supply and demand sink to their lowest point by New Year’s Day.
It is challenging to articulate just how dire the current inventory levels are today. In looking at supply and demand, when there is a very limited supply that is matched with insatiable, strong demand, the supply issue not only persists, but it can also become even more severe. That is precisely what has occurred in 2021. It has dropped to an unprecedented point.
Prior to COVID, from 2017 to 2019, the inventory averaged 12,001 homes. In 2020, it averaged 9,652, 20% less, and this year it is at 7,256 homes, 40% less. That is correct, it has averaged less than 7,300 homes. Last year’s 9,885 homes to end November was low for the time of year and close to the lowest level established in 2012 at 9,689. And this year, 6,556 inventory is 34% lower than that. The 3-year average prior to COVID for the end of November is 11,752, a jaw dropping 79% more, an extra 5,196 available homes, nearly double. That is a big difference, indicating just how starved the housing market is for inventory.
LOCAL BEACH CITIES
For perspective, in our local Beach Cities:
*** Note that these numbers actually include the low pandemic year of 2020.
How does this impact you? It depends. If you are thinking of selling your home, this is a great time to sell without a lot of competition and we should start that conversation now so that we can determine your timing and what you need to do to prepare for such a sale.
If you are interested in buying a home, you need to put yourself in the strongest position possible to make a strong winning offer. You will also need to be patient! Let’s talk about strategies that fit your situation and goals.