LA 2 Year Sales CoreLogic (Chart by Flourish)
“How Expensive?” tracks measurements of California’s deeply unaffordable housing market.
The pain: Los Angeles County home sales are selling at the slowest pace in 37 years of record due to sky-high home buying costs.
Source: My trusty spreadsheet looked at two-year periods of sales from CoreLogic statistics going back to 1988 to gauge how much the local housing market has cooled. Remember, in March 2022, the Federal Reserve began fighting inflation by raising interest rates. These moves have essentially doubled mortgage rates to the 7% range.
pinch
Just 107,772 homes sold in Los Angeles County in the 24 months ending in April 2024, the lowest two-year period since 1988. This marks the ninth consecutive month of record low sales.
The pace of homebuying in April was 43% below the 37-year average and 18% below the pre-pandemic low of 130,683 home sales in May 2009, at the height of the global financial crisis.
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Home affordability is a problem right now: The California Association of Realtors estimates that only 14% of households in Los Angeles County can afford to qualify to buy a home.
With mortgage rates at a 20-year high and prices remaining elevated, many homebuyers’ dreams have been dashed: CoreLogic’s April 2024 median home price is $865,000, up 1% over the past two years after rising 37% from 2020-22.
Regionally speaking
It’s similarly slow across the six-county region.
Just 357,486 homes sold in Southern California in the 24 months ending in April 2024, the slowest sales figures in two years and the lowest on record for the sixth consecutive year.
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Sales in the region are 33% below the 37-year average and 10% below the pre-pandemic low of 399,178 units recorded in March 2009.
It doesn’t help that the April median price of $760,000 is up just 1% over the past two years after rising 38% from 2020 to 2022. So that adds to the homebuying headaches: Realtors calculate that only 15% of Southern California households are eligible to buy.
postscript
Why do some observers call this a hot market? Well, there are only a few homes for sale, but those that do seem to sell quickly.
Single-family homes in Los Angeles are expected to sell in just 22 days in the first four months of 2024, 11 days faster than the average sales speed since 2000, according to statistics from the California Realtors.
Jonathan Lansner is a business columnist for the Southern California News Group. He can be reached at [email protected].