Events on both the local and global scale have had an impact on the Los Angeles housing market. The market has seen a noticeable amount of fluctuation, with a high number of buyers and sellers hitting the real estate scene in the past two years. However, real estate trends in 2023 Los Angeles may look somewhat different from the two most recent years.
Changes in Median Home Price
One of the most noticeable factors that will affect upcoming trends is the change in the median home price. At the start of 2023, the median home price saw a 2.8% drop compared to the previous year. Even more notable is that there was a 2.6% decrease from the last month of 2022.
LA COUNTY MEDIAN HOME PRICES
- January 2023: $778,540
- December 2022: $799,670
- January 2022: $800,960
A Balanced Market for Single-Family, Condo, and Townhomes
When examining the data from the previous month, Los Angeles County appears to be set at a balanced real estate market at present. This balance means there is an approximately even ratio between the number of homes listed for sale and the number of buyers on the market. These conditions can prove favorable for both buyers and sellers.
However, it is important to note that this view of the market does not include land, multi-unit properties, or other various types of property in the analysis. At present, the median number of days an LA County home stays on market is about 31 days.
Impact of a Looming Recession
While some economists suggested that prices for homes would see a steep decline in 2023, even the most pessimistic approach does not see the declines being comparable to the Great Recession of 2008. In contrast, a trend we might see is a moderate but stable increase in home prices due to the steady amount of demand. However, the pace will likely be mild at best, but an overall appreciation of home value should be expected.
Lower Rates for Single-Family Homes
While much of the market continues to operate at a steady pace, the market for existing single-family homes has taken a downturn. With approximately a 38.2% decrease from 2022 in terms of sales, this type of property may not be in line with the other real estate gains.
Impact of High Mortgage Rates
A key factor that will impact real estate trends in 2023 Los Angeles is the increase in mortgage rates. With the housing market also being inclined to buyers to pay slightly more than the asking price, this could impact the market to some degree. More precisely, these high mortgage rates have led to fewer and fewer buyers being prepared to up their bids on the prices of homes.
So What Will the Future Bring?
While there may be some single-digit percentage point decreases in 2023, the future may be bright on the horizon. However, first, the market will likely need to get through continued price decreases in 2024 on both the national and regional scale