Southern California Coldwell Banker Realty President, Jamie Duran, notes the following regarding the Southern California Real Estate Market as of August 31, 2021.
- Even as the pandemic persists and economic uncertainty rises, the housing market, although showing signs of some normalization, remains remarkably resilient.
- The market is just returning to pre-COVID levels where excess demand and too little inventory are at “regular” rather than extraordinary levels.
- According to CAR the percentage of respondents who thought it was a good time to buy increased from an all-time low of 17% in July to 18% in August.
- California Association of Realtors also notes that the California housing market has started to resemble a typical year as sales peaked in June and July before gradually declining in August. This is notable after the 2020 market completely bucked the typical seasonal pattern.
- Substantial price increases across Southern California are beginning to make the goal of becoming a homeowner harder and harder to reach.
- Southern California continues its trend of the current demand being higher than the current active inventory, meaning that the last 30-days of pending sales activity is higher that the number of homes available to purchase today.
- According to the Multiple Listing Service the expected market time (the amount of time between hammering in the FOR-SALE sign to opening escrow) is 18 days. It has remained below 45-days since the beginning of June 2020. Anything below 45-days indicates an insane, scorching hot housing market where buyers are tripping over themselves to be the first to see a home that just hit the market, multiple offers are the norm, and homes regularly sell above their list prices.
- It is more important than ever to have a trained, full-time, experienced Realtor to represent your interests in what is usually the largest financial transaction of your life.
Current inventory levels remain an issue
- Southern California began August of 2021 with 38,685 active listings 32% below pre-Covid levels of July of 2020. San Diego County was below 47% 2019 levels.
- In August of 2021 27,599 new listings hit the market. This was an 11% decrease from August of 2020 with San Diego having the biggest year over year decrease of 23%.
- Closed sales of 24,665 were 1% more than August of 2020 throughout Southern California.
- Active listing inventory decreased minimally to 37,984 which remains about 32% less than inventory levels in 2020.
- The average selling price for a home remained above one million dollars at $1,007,912, about $10,000 less than July of 2020.
- Despite the relatively flat results in home closings, the decrease in new listings resulted in inventory levels shrinking further.
Duran further elaborates on the challenging inventory levels noting that with today’s large population of boomers aging in place, more and more are choosing to remodel and staying put vs. selling. As the pandemic and its variants have resurfaced recently, sellers are still holding, but as restrictions lessen, she anticipates that we will see more inventory. Similarly, foreign investors dropped off but will re-enter as the pandemic effect lifts. We have seen more local investors and less foreign investors keeping the balance of competitive offers against the traditional buyers who purchase with the intention of occupying the home. California is still the 2nd highest state in the US for international purchases at 16% behind only Florida at 21%. There were only 107,000 international purchases from April 2020 to March 2021, the lowest unit and sales volume since 2011 according to the National Association of Realtors.
High-end Luxury Market is Strong
- In the last twelve months ended 08/31/21, sold volume of homes greater than $10,000,000 once again more than doubled to $16,624,7529,910 from $8,178,329,342 in the prior twelve-month period.
- Volume of homes sold greater than $5,000,000 also more than doubled in the last twelve months ended 08/31/21 to $44,192,179,644 from $21,401,295,228 in the prior twelve-month period.
- On the Westside there have been 747 closings greater than $5 million this year vs. 412 in the first eight months of 2020. Additionally, 65 of sales were $20 million plus this year vs. 37 in 2020. The Uber high-end has experienced 20 sales over $20 million, 12 sales over $30 million, and 11 sales greater than $40 million.