Los Angeles for sale listings, home prices drop in December

LOS ANGELES — Home prices in the Los Angeles metro in December dropped about 5% and listings nearly 40% year-over-year as higher mortgage rates affected demand, RE/MAX reported.

What You Need To Know

  • The median sales price in the Los Angeles MSA, including Orange County, in December dropped 5% from $850,000 to $810,000 year-over-year
  • For-sale home listings have also dropped nearly 40% in the Los Angeles MSA
  • Real estate experts say that the market is rebalancing
  • Nationally, Los Angeles was among the top five markets that saw a significant decrease in median sales price and listings

According to RE/MAX data released Wednesday, the median sales price in the Los Angeles metropolitan area, including Orange County, in Dec. 2022 was $810,000, a 4.7% drop from the previous year’s $850,000 sales price.

New for-sale home listings have significantly declined from 5,768 listed in Dec. 2021 to 3,540 in Dec. 2022, a 38.6% year-over-year drop.

Nationally, the Los Angeles metro was among the top five markets that saw a significant year-over-year decrease in home sales prices and listings. Iowa and Phoenix had the most significant reduction in new listings, dropping 43% and 40%, respectively.

Meanwhile, the San Francisco Bay Area metro, Honolulu, Hawaii and Seattle saw a 5% and 4% drop in median sales price, respectively.

RE/MAX President and CEO Nick Bailey said that the housing market is rebalancing after low-interest rates and pent-up demand fueled home-buying demand during the first two years of the coronavirus pandemic.

“As strong believers in the advantages of homeownership, we think the ongoing market rebalance is actually a good thing,” said Bailey in a news release.

RE/MAX’s December report highlights how Los Angeles’ housing market shifted as mortgage rates rose because of the Federal Reserve’s move on interest rates to curb inflation throughout the second half of 2021.

Just 12 months ago, Los Angeles’ housing market was hot, with plenty of bidders and many overbidding on homes, said Alex Avilez, broker-owner at REMAX West Covina, in an interview with Spectrum News.

Not anymore.

“The rates and economic uncertainty have buyers and sellers pulling back,” said Avilez, who specializes in the San Gabriel Valley market.

He said buyers are scared off because of the high rates and the unknown. Meanwhile, sellers are becoming impatient and not wanting to sell their homes for less than what their neighbor sold theirs for last year.

“Sellers are shocked,” he said. “A lot of sellers got used to seeing the [bidding wars]. Now that’s not happening. It’s like they list their home, and a week goes by, and they blame their agent for not doing their job.”

“Buyers have always controlled the market,” he said.

Avilez predicts the market will eventually rebalance once mortgage rates stabilize in the 5% to 6% range.

For those expecting a housing crash similar to the Great Recession in 2008 to 2009, Avilez doesn’t see that happening.

“It’s supply and demand, especially here in Los Angeles and Southern California,” he said. “There’s just not enough homes for the population.”