Los Angeles saw highest number of units sold, Orange County had the highest average sales price, Riverside’s average days on market dropped the most, and San Diego experienced the lowest inventory of the four counties.
Extremely low inventory levels are pervasive across Southern California as homes sold on average 55% faster in February 2021 over the same time last year, according to a new report by Coldwell Banker Realty, the area’s No. 1 real estate brokerage. The data is based on single family closed sales transactions recorded by the Multiple Listing Service.
“Days on market and months of inventory are the metrics to watch when looking for market swings and, in this case, the increasing buyer demand. The overall decrease in days on market year over year really demonstrates the very low supply vs high demand,” said Jamie Duran, president of Coldwell Banker Realty in Southern California. “This month, it’s even more interesting to compare year over year data because February 2020 was pre-COVID-19 lockdown and today, the industry is operating surprisingly well in a ‘new normal’ daily COVID-19 lockdown. Last year this time, the market was extremely healthy and on its way to a record year. Then the world stopped – a couple of months were lost before the market picked up like a rocket ship in July. Today, the market is flourishing even more.
“The question everyone asks is why is there such low inventory, and how much longer will that last?” Duran added. “One of the main reasons for low inventory now and why it has been an increasing issue over the last few months, is simply fewer sellers feel comfortable and safe about buyers and agents roaming through their homes, instead of learning the measures brokerages and agents are taking to make sure everyone is safe and homes remain sterile. Also, sellers are undecided about where they will go next. However, as we get closer to the end of this pandemic and stay at home orders are lifted and normal activities, vaccinations and consumer confidence increase, that could change.”
Los Angeles saw the highest units of listings sold with a 13% increase in February 2021 over the same time last year. Orange County had the highest average sales price at $1,116,843 in February 2021 representing a 14% increase over the previous year. Riverside showed a surprising 65% decline in days on market year over year, with homes selling in an average of 14 days in February 2021 compared to an average of 40 days in February 2020.
“There’s a lot of data to unpack in this report. It’s rare to see days on market decrease to single digits the way San Diego and Orange County have dipped all the way down to seven and nine days respectively. This is a normal sign of a seller’s market with low inventory and low days on market, and explains why we’re experiencing the multiple offer frenzy at every level, including the luxury end,” said Duran. “It’s also interesting to see the sharp decline in days on market in Riverside County, as well as homes selling faster than ever. It’s clear that telecommuting is playing a key role and buyers are choosing to live where they want instead of where they work. Demand is high and the double-digit price increase across Southern California is another indicator we have no signs of slowing down into this Spring market.
“This is easily one of the best seller markets we’ve seen. Sellers who have considered selling and cashing out in the next few years should give serious consideration to sell now, because as stay at home orders ease, the economy opens and COVID environment improves, more and more people may list. In a ripe seller’s market, it is best to be one of a few rather than one of many.”
Below are some additional findings from the February 2021 Coldwell Banker Realty market data report:
- Units Sold: February 2020 over February 2021 comparison shows Los Angeles County with the highest number of listing units sold with a 13% increase at 4,469, while Orange County’s number increased by 9% to 2,227 listing units sold, Riverside County’s number increased by 8% to 2,715 units, and San Diego County’s number was the only region to decrease but only by 1% year over year to 2,422 listing units sold.
- Average Sales Price: Orange County led the Southern California housing market with the highest average sales price of $1,116,843 in February 2021, up 14% over the previous February when the average sales price was $981,861. Los Angeles followed with the next highest average sales price of $1,074,525 in February 2021, representing a 21% increase from last year’s average of $888,607. San Diego saw an increase of 22% in its average sales price to $868,621 in February 2021, up from $712,111, and Riverside County showed a 21% increase in average sales price to $563,136 in February 2021, up from $465,166 in February 2020.
- Days on Market: Riverside experienced the largest decline at 65% with an average of 14 days on market in February 2021 down from an average of 40 days on market in February 2020. Orange County followed with a 57% decline to an average of single digit 9 days in February 2021 from an average of 21 days in February 2020. San Diego closely followed with a 56% decline to an average of only 7 days on market in February 2021, down from an average of 16 days the previous year, and Los Angeles County showed a 43% decrease to an average of 12 days on market in February 2021, down from 21 last year, same time.
- Inventory: Inventory was scarcest in San Diego County with less than one month of inventory available in February 2021, a 65% drop over last year. Riverside followed with 1.5 months with a 67% decrease vs previous year, then Orange County dropped 23% to 1.7 months, and a 19% decrease in Los Angeles with 2.2 months of inventory in February 2021.
- Average Price Per Square Foot: With Los Angeles County’s $495 average price per square foot, it emerged as the highest priced county in Southern California in February 2021. Orange County followed with an average of $471 price per square foot, San Diego County with $438 average price per square foot, and Riverside County with an average of $239 price per square foot. All counties enjoyed an average 14% increase.
The Southern California Housing Market Report is a monthly report produced by Coldwell Banker Realty.