Consumers are continuing to show high confidence in the real estate market with record numbers across Southern California, including a monthly year over year increase in volume of 141%. The number of homes sold increased 69%, prices increased 43%, and monthly supply declined 56% compared to April of 2020 when the market was just beginning to adjust to the pandemic. These metrics are creating high demand and bidding wars, according to a new report by Coldwell Banker Realty, the area’s No. 1 real estate brokerage. The data is based on closed sales transactions recorded by the Multiple Listing Service from 2020 – 2021.
A surprise amid the chaos, the last 12 months have been the strongest on record. “Even though the Pandemic shut down Southern California mid to late March 2020, MLS data indicated an extraordinary number of sales in process and closed on the books that lasted all the way through March. Therefore, we didn’t see the market change immediately,” added Duran. “However, by April 2020 it seems the reality of the Stay-at-Home orders set in and everything basically stopped; we didn’t know how the market would react.”
“In hindsight, April/May 2020 turned out to be the SOCAL real estate market’s Pandemic peak where most buyers and sellers were frozen in time. We moved into a strong “moving forward” period from June to February where the market just took off despite all odds. There was a short lull in the market in November to early January when we had the second shut down, the changing of the presidential administration and where actually, the normal seasonal slowdown usually shows up anyway. And now a year later, as the CDC reports COVID cases are beginning to drop significantly, we’re transitioning into what looks like a post pandemic environment and back to a pre-pandemic world. Yet, the real estate market doesn’t seem to know the difference as we now have a clear picture from data showing us how the pandemic affected real estate. We never could have imagined things would have turned out this way with the industry in the strongest position it as ever been,” Duran explained.
While most numbers in April barely changed from 2019 to 2020, they jumped radically from 2020 to 2021, much of which was spent during the more restrictive phases of pandemic. Across the MLS throughout Southern California, prices increased a dramatic 43% year over year compared to the 3% decline from 2019 to 2020.
“Some of the factors contributing to that decline include the low inventory at that time and the fact that buyers might have negotiated better deals the first month or two into COVID,” added Duran. “2019 was stronger than 2020 in volume across every county, but now take a look at a year later as we find ourselves in April of 2021. We’re up 141% in volume across Southern California. Orange County alone is 182% higher than it was a year ago. These record numbers are stronger than they have ever been. In my entire real estate career, I’ve never seen numbers across the board for volume, sales price, and price per square foot so high.
“We’re seeing the perfect storm with the days on market down 40%, the average sales price up 43%, the month supply down 56%, transactions up 69% and price per square foot up 31%. Furthermore, if prices are up 43%, but the price per square foot is only up 31%, bigger homes are selling. Being stuck at home during a lockdown makes more space a premium and somewhat explains why those larger properties are more attractive now. We’re also seeing price put into perspective. Over the last 12 months, there were 4,086 properties over $5 million that sold, compared to 2,326 that sold from April 2019 to April 2020, representing a 76% increase.
“We’re also not seeing the seasonal increases in inventory we used to see every spring and summer centered around the school year when families would plan moves. With the preponderance of virtual schooling, all that has blurred over the last year. December is typically the low point of inventory every year with typical increases through April or May. In 2020, inventory declined in December and has continued to decline since then to extreme lows through the first four months of 2021.
“I also think there’s now a much larger buying group that’s going to work at home the rest of their lives and that has completely redefined home. It’s become a lot more important, and despite the pandemic, confidence in real estate has increased. I think Riverside is seeing it most dramatically because it’s less expensive per square foot, you can get double the house there, and commuting time for many people is no longer in the home equation.
“However, while we’re all enjoying these record highs, we know real estate is cyclical,” said Duran.
Below are some additional findings from the April 2020 to April 2021 Year over Year Coldwell Banker Realty market data report:
- Average Sales Price: Los Angeles led the Southern California housing market with the highest average sales price increase of 39% from April 2020 to April 2021, with its average price jumping to $1,372,762 in the same time period from $990,877 in 2020. San Diego followed with the next highest increase of 37% with its average price increasing to $1,151,850 in 2021 from $840,539 the previous year. Orange County home prices jumped 36% from an average of $1,472,577 in 2021 compared to $1,085,837 during the same time period in 2020. Riverside County home prices increased 33% to $642,233 in 2021 compared to $482,731 the previous year.
- Inventory: Inventory was scarcest in San Diego County with less than one month of inventory available and a 71% drop over the same period last year. Riverside followed with 1.2 months of inventory over the same period, representing a 64% decrease vs the previous year, then Los Angeles County dropped 41% to 1.9 months, and a 41% decrease in Orange County with 1.6 months of inventory year over year.
- Days on Market: Riverside experienced the largest decline at 50% with an average of 24 days on market from April 2020 to 2021 down from an average of 48 days on market. San Diego followed with a 46% decline to just over 13 days during the same time period from an average of 24 the prior year. Orange County experienced a 28% decline to an average of 21 days on market, down from an average of 29 days the same period, and Los Angeles County showed an 18% decrease to an average of 23 days on market from April 2020 to April 2021, down from 28 from April 2019 to April 2020.
- Units Sold: April 2020 to April 2021 comparison shows Orange County with the highest number of listing units sold with a 107% increase at 2,212 while Los Angeles County’s number increased by 82% to 4,725 listing units sold, Riverside County’s number increased by 51% to 2,899 units, and San Diego County increased 44% year over year to 2,228 listing units sold.
- Average Price Per Square Foot: Los Angeles County’s $604 average price per square foot increased 25% over the previous year average of $485, it emerged as the highest priced county in Southern California. Orange County followed with an average price of $599 per square foot, up 24% from $482 the same time period the previous year. San Diego County’s $521 average price per square foot increased 28% over the previous year average of $406, and Riverside County with an average price of $280 per square foot increased 27% over the previous year over year $221 average price per square foot. All counties enjoyed an average 31% increase.
- Los Angeles Luxury Market: $8 billion worth of $10 million+ properties were sold in April of 2020. Almost $13 billion worth of $10 million+ properties were sold in April 2021. There were 24 closed sales of $20 million+ properties compared to 12 closed sales of $20 million+ properties at this time last year, representing a 100% increase.
The Southern California Housing Market Report is a monthly report produced by Coldwell Banker Realty.