Is a Market Shift on the Horizon in South Bay?

Los Angeles and South Bay Real Estate Video Blog with Lenny LaRocca

According to the latest statistics, we may be on the verge of a market shift. However, it’s still a great time to both buy and sell in the South Bay marketplace.

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My team and I believe we’re seeing the signs of an early market shift, and I have the numbers to prove it. If you follow along in the video above, you’ll see several graphics with statistics that reflect the year-to-date results of our market through September 2017. Let’s start with home sales. There were 1,360 homes for sale in September 2017, which was a decrease of 1% compared to August 2017 and an 11% decrease compared to September 2016. The number of homes closed in September 2017 totaled 861 units, which was an 11.2% decrease compared to August 2017 but a 3.6% increase compared to September 2016. There were 883 homes placed under contract in September 2017, which was a 3.6% decrease compared August 2017 but an 11% increase compared to September 2016. The average price per square foot in September 2017 was $525, which was a 1.1% drop from August 2017 but an 11% rise compared to September 2016. We’ve had a shortage of inventory throughout most of 2017, so that 11% year over year increase shows that buyers are more active and paying a premium for available homes. The average days on market for September 2017 was 33 days, which was a 6.5% rise compared to August 2017 but a 29.8% drop compared to September 2016. Buyers are more active than they were a year ago, but because we’re seeing a month-to-month slowdown, I believe that slowdown will continue. Properties in September 2017 sold at about 97% of their list price, but that number had been dropping over the last month or two, which is another indicator of a market slowdown.

We’re still in a seller’s market, but now is a great time to buy or sell.

The average active sales price per square foot for September 2017 was $1,654, which represents a 1% drop compared to August 2017 but a 10.6% spike compared to September 2016. The average sold price per square foot for September 2017 was $922, which was a decrease of 3.5% compared to August 2017 and 14.5% increase compared to September 2016. These statistics explain why whenever my clients ask me how much our market has appreciated from 2016 to 2017, I say a fair answer is about 10% to 11%. Lastly, we’re averaging about 1.6 months’ worth of inventory for September 2017, which is up 14.4% compared to August 2017 but down 11% compared to September 2016. As these numbers show, we’re still in a seller’s market, but now is a great time to buy or sell. Mortgage rates are still hovering around 4%, and our economy is still robust. If you’re a seller or an investor who wants to lock down your gain from the past three, five, or seven years of appreciation, this is without a doubt the market to do that. If you have any other questions about our market or you’re thinking of buying or selling in the Los Angeles County/South Bay marketplace, don’t hesitate to reach out to me. I’d love to help you.