“Tight Inventory” is the Norm the Latest Southern California Market Snapshot for May 2018
It’s been the norm for the past 5 years or so in the Long Beach area – buyers in competitive bidding situations and sellers reaping the reward of great investments. This year is showing signs of being the same. Here is your Southern California Market Snapshot for May 2018 (comprised of south Los Angeles County and North Orange County).
Extremely Positive Indicators Drive Southern California Real Estate
As we wind our way into the summer months, we see similar pressure in the marketplace as in years past. Many point to the economy which has certainly added fuel to the market. Low unemployment, pressure on rising wages, even against rising interest rates, provides additional incentive on the part of buyers. Buffeted by continuous positive economic news, experts anticipate Real Estate demand in Southern California to remain quite strong well into 2019. So buyers will need to compete and make offers quickly to take advantage of lower interest rates.
New Listings, Pending Sales and Closed Sales
New Listings for single family homes were down 2.5% (3,707) in the month of May when compared to last year. And year to date, the number of homes listed is down 1.6% (16,668). For Townhomes and condos, the picture is similar with new listings being down 3.5% (1,612) year-over-year. Year-to-date however, the picture is a bit different with more homes being placed on the market in 2018. Pending sales year-over-year show a dramatic change with 42.5% (1,622) fewer homes going into escrow in May with 46.4% (697) fewer townhomes/condos properties heading into escrow.
With fewer homes going into escrow in 2018 than the previous year, it is logical to see that fewer single family homes are closing year-over-year (-7.8%, 2,626) and year-to-date (-3.2%, 10,824). Similar numbers are drawn out in townhomes/condos (-8.9%, 1.217) and (-6.7, 5,232) respectively.
Average Sale Price – Low Inventory Translates into Continued Pressure on Home prices
The average sales price of homes in the Southern California Market Snapshot for 2018 indicate continued pressure in the marketplace. Year-to-date, the average home price across south Los Angeles County and North Orange County increased 6.8% to $685,114 while year-over-year, that average price increased 7.8% to $936,033. Townhomes/condo prices percentage increase followed suit with a 4.8% ($415,944) and 9.1% (511,746) respectively.
Home Inventory, Days on Market and Month’s Supply
The number of single family homes actively on the market has remained steady over the past year. Yet, there’s been a downward trend over the past 5 years. The number of townhomes and condos on the market are up closer to 2016 after a major dip in 2017.
One of the most relevant indicators of a marketplace is the number of days a home stays on the market. For both single family homes and townhomes/condos days on market dropped precipitously in 2017. This signals a strong sellers market. Low days on market continue to be the norm as buyers flock to the market to take advantage of lower interest rates.
Surprisingly, even as pressure continues in the marketplace, there are signs (albeit small) that the market is starting to steer itself toward stable buyer/seller market. The Southern California Real Estate snapshot for May 2018 indicates this with an increase of monthly supply for both single family homes and condos.
The outlook, as we move into 2018, looks very good for home sellers. Home buyers will still need to compete for homes until the inventory increases. As a seller, you want to put more money in your pocket. As a home buyer, getting more home for your money will still be a driving force. If you want to know more, give me a call at 562-618-9770 or email me at email@example.com. I’ll gladly spend time providing any insight you may need.
Dave Harbison has been a Real Estate Practitioner in Long Beach and surrounding communities for over 12 years. He regularly contributes to blogs, news outlets and other media, providing insight to home owners, buyers and sellers in the Long Beach, Seal Beach, Lakewood, Sunset Beach, Huntington Beach, Newport, Cypress and Cerritos. Dave Harbison Long Beach REALTOR® Main Street Realtors (562)618-9770 firstname.lastname@example.org DRE:#01475840 — Long Beach Realtor® / Real Estate Agent Long Beach Homes for Sale, Condos and Investment Properties