Demand continues to outpace supply throughout all three Southern California counties as active listings shrank 44% from last year’s 61,299 to 34,255. San Diego showed the biggest decline of 59% going from 7,108 active listings to 2,914, according to a new report by Coldwell Banker Realty, the area’s No. 1 real estate brokerage. The data is based on all transactions recorded by the Multiple Listing Service comparing May 2021 to May 2020.
While the number of active listings have declined year over year, there was a slight improvement in new listings taken year over year in May throughout Southern California, according to the MLS, showing more new listings from 25,962 to 27,483. LA County alone showed an increase of 10%, going from 6,821 to 7,481. This resulted in lower days on market, which were down 49% to 19 days vs. 37 a year ago across the Southern California MLS. Riverside was down 53% to 22 days vs. 47 days in May of 2020.
“We’ve had 17 mortgage rate reductions since the start of the pandemic, with the rate for a 30-year fixed mortgage falling to 2.95% last week alone. All those reductions have freed up funds for more individuals and created a flood of buyers, price wars and drain on inventory. It also caused first-time homebuyers to rush into the market in numbers not seen in more than a decade. “The challenging result has been an increase in prices and overall demand, which has made it difficult for home buyers to secure a home in an ultra-competitive market,” said Jamie Duran, president of Coldwell Banker Realty, Southern California. “All of these statistics reflect the effects of those rate reductions.
“New home construction isn’t keeping up either. Lumber prices are at an all-time high, showing a 400% increase over the last year, which was fueled by renovation and repair spending, as homeowners improved their spaces to accommodate the new normal. That lumber shortage has pushed new home prices higher,” added Duran. “This also fueled existing housing sales as buyers rushed to purchase larger homes with office space, gyms and room for homeschooling. Unfortunately, that creates a double crunch, adding to inventory scarcity and making existing homes and new homes available to buy scarce and in hot demand.”
Below are some additional findings from the Coldwell Banker Realty’s year over year May 2021 market data report:
- Average Sales Price: Overall, the Southern California MLS showed the average sales price up 40% to $1,042,877 from $747,176 the prior year. San Diego led with the highest average sales price increase of 49% from May 2020 to May 2021, with its average price jumping to $1,030,045 in the same time period from $691,921 in 2020.
- Inventory: According to the Southern California MLS, supply throughout the region declined 55% showing 1.5 months of inventory vs 3.3 the prior year. Inventory was scarcest in San Diego County with 0.8 months of supply compared to 2.5 months of supply, representing a 68% drop over the same period last year.
- Units Sold: May 2020 to May 2021 comparison revealed an increase of 90% to 47,779 vs 25,188 a year ago throughout the region. Orange County led with an increase of 130% to 3,194 from 1,387 the prior year. Los Angeles County followed with a 114% increase to 6,254 from 2,916 last year.
- Average Price Per Square Foot: The average price per square foot increased 31% to $535 from $407 throughout Southern California, with San Diego leading at a 33% increase to $538 from $404.
- Volume: Throughout Southern California, monthly sales volume increased 166% to just over $50 billion vs close to $19 billion last year. Orange County led with an increase of 202% to just over $7.5 billion vs more than $2.5 billion a year ago. Los Angeles followed at an increase of 191% to over $14.6 billion vs just over $5 billion. The last 12 months’ sales volume is up 46% to just over $503.5 billion vs over $344 billion.
- Over $10 Million: While new active listings are flat, monthly unit sales are up 279% to 106 vs 28 year over year. Orange County led with an increase of 250% to 14 vs 4, followed by Los Angeles with a 425% increase to 42 vs 8 the same time last year. New listings increased 12% to 155 vs. 138 a year ago, with Riverside leading the region with a 200% increase to 6 vs. 2. Monthly sales volume in this category increased 382% to over $1.9 billion vs just over $400 million year over year across the region.
- Over $5 Million: Volume increased 46% year over year for properties priced over $5 million, rising to just over $503 billion from over $344 billion across Southern California. Orange County led the region with an increase of 49% to $74.7 billion vs. $50.2 billion with Riverside following, showing an increase of 51% to $45.1 billion vs. $29.9 billion year over year.
The Southern California Housing Market Report is a monthly report produced by Coldwell Banker Realty.