Before divulging the key to understanding the L.A. housing market, let me welcome you to In The Black. This is the first installment of our monthly newsletter in which we cast a sharp eye on the ever-fluid real estate market: Where’s it at? Where’s it going? What do you need to know?
Our goal is to break it down for you as clearly and precisely as possible. No fluff. No ramble. No B.S. Just the facts as we see them, quickly laid out so you can make informed real estate decisions. It’s that simple.
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What’s the key to the 2022 housing market in L.A.?
INVENTORY
There’s so much speculation in the market right now, with buyers and brokers alike. What’s going to happen with mortgage rates? What’s going to happen with the Fed? What’s inflation doing? Then you add Omicron or a potential new strain to all that, and things get potentially murkier. However, one thing is crystal clear: available inventory will be the key market indicator in 2022.
“It is possible that rising mortgage rates will slow the housing market. But I believe one thing is for certain: inventory will tell the tale!”
Bill McBride, Founder, CalculatedRISK
KET STAT
Inventory down almost 27% year over year
(most of the country hovering between 15-30%)
KEY PROJECTION
2022 will be another strong year, with higher mortgage rates, and home sales peaking (or plateauing?) at a 16-year high. In Los Angeles, look for 8.0% appreciation over the course of the coming year (relative to last year’s growth of 16.4%).
Be well,
Charles
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Real Estate News & Trends
01 World’s Largest Wildlife Crossing Under Way in Los Angeles
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02 Best Places to Invest in Property in 2022
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03 Five Housing Trends for 2022: What’s ahead for mortgage rates, home prices?
(Read 5 min)
Market Data, Intel & Forecasts
01 Mortgage Rate Snapshot: Mortgage rates topped 4.0% last week for the first time since 2019. Despite the recent upward movement, rates remain below what they were before the pandemic and near historic lows. On Thursday, February 24, 2022, according to Bankrate’s latest survey of the nation’s largest mortgage lenders, the average 30-year fixed mortgage rate is 4.25% with an APR of 4.20%. The average 15-year fixed mortgage rate is 3.46% with an APR of 3.47%. The average 5/1 adjustable-rate mortgage (ARM) rate is 2.93% with an APR of 4.03%. (Source: NextAdvisor with TIME)
02 Resale Market Conditions: In Los Angeles, there is presently one month’s supply of home inventory, relative to 2.2 months’ supply a year ago. Total listings are down from 12,491 a year ago to 7,202 (-42% YOY). Days on Market (DOM) is down slightly from 40 DOM a year ago, to 35 DOM in February 2022 reflecting even higher demand. (Graphs & Data)
03 Existing Home Values & Forecasts: Los Angeles ended the year at 16.4% year-over-year growth, the highest we’ve seen since 2013 which experienced 17.4% growth. 2022 is forecasted to end the year strong at an 8.0% increase. Based on the data above, those thinking about selling are still in the driver’s seat, however, in the upcoming years, growth is forecasted to reflect below-average numbers with 2025 being “in the red” at -2.0%. (Graphs & Data)
3001 Benedict Canyon Dr
Beverly Hills P.O. | $13,400,000
VIRTUAL TOUR
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10800 Wilshire Blvd, Residence 1303
“The Wilshire Corridor”, Westwood | $3,975,000
VIRTUAL TOUR
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7853 Willow Glen Rd
JUST SOLD | Represented Seller
Hollywood Hills | $3,090,000
Featured in Mansion Global
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6933 Treasure Trail
JUST SOLD | Represented Seller
Hollywood Hills | $1,608,470