The real estate market in Los Angeles County has had its ups and downs in recent years, with fluctuations in the number of homes sold, median sales price, and average days on the market. However, the market is expected to see some positive effects in 2023 due to low unemployment rates and a strong GDP growth projection.

Additionally, the county is expected to experience population growth, which could lead to increased demand for housing and higher prices overall. In this blog post, we will delve deeper into these trends and explore how they may shape the future of the Los Angeles County housing market.

Number of Homes Sold

The real estate market in Los Angeles County has been a rollercoaster ride in recent years, with sales fluctuating up and down. Looking at the data provided for the previous years, we can see that over the past five years, the highest number of home sales was in Q2 2021, with 17,265 homes sold. In contrast, the lowest number of sales was in Q1 2019, with 8,696 homes sold.

However, focusing on Q1 2023, we see a significant drop in the number of homes sold, with only 7,991 homes sold. This represents a decrease of 36.7% from the previous quarter (Q4 2022) and a decrease of 40.3% from the same quarter in the previous year (Q1 2022).

The drop in sales for Q1 2023 can be attributed to several factors including a reduced supply of homes and increasing interest rates. It will be interesting to see if this trend continues in the next quarter and if there are any shifts in the market.

Analyzing the trend over the past five years, we can see that overall, there has been a general increase in the number of homes sold, with Q2 being the most popular quarter for home sales. Q1 usually sees a dip in sales, which then gradually increases in the following quarters. However, the sharp decrease seen in Q1 2023 is a significant outlier compared to the previous years.

Median Sales Price

The median sales price for Q1 2023 is $855,500, which represents a decrease of 5.4% from the previous quarter (Q4 2022) and a decrease of 5.9% from the same quarter in the previous year (Q1 2022).

It is interesting to note that while the number of homes sold in Q1 2023 saw a significant decrease, there was only a slight drop in the median sales price of homes sold. It could be that the supply-demand balance for housing is still skewed towards the seller’s advantage, keeping the median price relatively stable.

When we analyze the trend over the past five years, we see that there has been an overall increase in median sales price, with the highest median sales price of $965,000 seen in Q2 2022. However, as we can see from Q1 2023’s data, the trend could be shifting towards lower median sales prices unless we get some more inventory coming into the market.

In conclusion, while the median sales price in Q1 2023 for homes sold in Los Angeles County saw a slight decrease, it remains relatively high compared to previous years. It is crucial to keep an eye on the data in the upcoming quarters to understand fully the trends and how they relate to the current challenging market conditions.

Average Days on Market

The average DOM for Q1 2023 is 39 days, which represents an increase of 25.8% from the previous quarter (Q4 2022) and is nearly double the same quarter in the previous year (Q1 2022).

The increase in the average DOM of homes sold in Q1 2023 is not surprising given the significant decrease in the number of homes sold and the drop in median sales price. It could mean that homes are taking longer to sell, as potential buyers may be holding out for a market drop that isn’t coming or may be unable to afford higher prices.

When we look at the trend over the past five years, we can see that the average DOM of homes sold has been gradually decreasing until Q4 2021. However, there was a sudden drop in Q1 2022, which could be attributed to the impact of the COVID-19 pandemic on the market. In comparison, Q1 2023 saw a rise in the average DOM, with homes taking longer to sell than in the past two years.

It is worth noting that the average DOM often correlates with the number of homes sold and the median sales price. In the case of Q1 2023 data, there were fewer homes sold, and the median sales price decreased, which could be contributing factors to the increase in the average DOM.

Los Angeles County Unemployment Rate

Los Angeles County, California is expected to have one of the lowest unemployment rates in the United States in 2023. According to projections by the University of California, Los Angeles (UCLA), the county’s unemployment rate is projected to be just 4.5% in 2023. This low unemployment rate will have a positive effect on the local housing market.

Low unemployment means that more people are employed and have money to spend on housing. This increased demand can lead to higher home prices as well as higher rental rates. Rental rates are also expected to rise due to increased demand from businesses moving into the area and from people relocating from other parts of California or from elsewhere in the US.

Overall, the low unemployment rate of Los Angeles County could provide a boost for its local housing market in 2023 and beyond. With a strong economy driving job growth and resulting in increases in demand for housing, it is likely that both home prices and rental prices will continue rising throughout the year ahead.

Los Angeles County GDP

Looking ahead to 2023, the Los Angeles County, California GDP is expected to continue its strong growth trend. According to projections by the University of California, Los Angeles (UCLA), the county’s GDP is expected to increase by 3.2% in 2023. This continued economic expansion is likely to have an impact on the local housing market.

With a growing economy, businesses are investing more in the county, leading to job growth and higher demand for housing. This increased demand can lead to further increases in home prices and rental prices. The median home price in LA County is expected to increase by 4.4% in 2023, according to a Zillow report. Some neighborhoods in the county, such as Santa Monica and Beverly Hills, have already seen median home prices exceed $2 million.

The strong economy is also expected to drive rental prices higher, with increases in rent projected to be higher than the national average. According to a market forecast by Yardi, rental growth rates in Los Angeles County are expected to be above the national average in 2023, with projected rent growth of 6.9%. This is likely to be driven by strong job growth in the area, with employers in industries such as technology, entertainment, and healthcare expanding their operations.

Los Angeles County Population Growth

Los Angeles County, California is projected to experience a population growth rate of 2.1% in 2023. According to projections by the University of California, Los Angeles (UCLA), the county’s population is expected to reach 10.5 million people in 2023, making it the most populous county in the United States. This population growth has implications for the local housing market.

The influx of new residents will lead to increased demand for housing and higher prices overall. This level of demand may be driven by an influx of new businesses that are steadily moving into Los Angeles County, as well as people relocating from other parts of California or even from outside the state.

With higher demand for housing comes a need for more housing supply, which could mean new construction projects being undertaken throughout LA County over the next five years. But due to land use restrictions and high construction costs, it can be difficult for developers to secure permits and break ground on new housing projects — something that could further push home prices upwards due to a lack of supply relative to demand.

Conclusion

In conclusion, the Los Angeles County housing market has been through a rollercoaster ride in recent years, with fluctuations in the number of homes sold, median sales price, and average days on the market. However, projections for 2023 show positive trends due to a low unemployment rate, strong GDP growth, and a projected increase in population growth.

While the demand for housing is expected to increase, developers may face challenges in securing permits and breaking ground on new housing projects due to land use restrictions and high construction costs. It will be interesting to observe how these factors play out and their impact on the Los Angeles County housing market in the upcoming years.