That's a wrap on Q1 of 2023! And what a wild ride it was!
We started the year with gloomy weather and gloomier headlines. The cold and wet winter weather, combined with high interest rates, a slow 4th quarter and all kinds of negative news meant a slow start for the real estate market this year.
But all it took was a short lived drop in interest rates, a little bit of sunshine, and a looming mansion tax to bring out the buyers! The downward trend in pending and closed sales for our market ended in January and we had month-over-month increases in both February and March.
We're also seeing prices in most areas and most price points ticking up from the bottom. National trends are similar. According to the Black Knight’s mortgage monitor report, home prices rose 0.16% nationally in February compared to the month prior, marking the first monthly increase after seven months of declines.
These price trends are largely driven by a continued lack of inventory. Despite there being more homes for sale than the same time last year, we are still well below pre-pandemic / 'normal' levels. And the number of new listings coming to market each week is well below what we typically see or saw last year.
One exception to the positive price trends this quarter would be the luxury LA market where there was a race for sellers to close prior to April 1st to avoid the incremental transfer tax that came with measure ULA - costing sellers 4% on sales over $5M and 5.5% on sales over $10M. We saw offers of luxury cars, trips to Europe, huge buyer's agent bonuses, huge price cuts, etc. to incentivise buyers to close before the deadline and people jumping through hoops to close deals in record time. We've seen a slew of high-end listings that didn't manage to sell before the deadline, come off the market this week. And I wouldn't be surprised if one of the major consequences of this policy is folks holding on to their properties longer, keeping inventory down.
As always, every micro-market in LA is different and every client scenario is unique! Some neighborhoods are seeing a rise in inventory and may end up being areas of opportunity for buyers. If you have questions, want more data, or would like to discuss any specific scenarios... give me a call!
