LA Real Estate Statistics 2022-2023 and 2021-2020
The Los Angeles real estate market has remained up to par with national trends that have been increasingly influenced by the indicators of the ongoing COVID-19 pandemic. Here are some of the trends and forecasts for 2021 -2022.
- Los Angeles home values have seen an increase by 15.9%
- Los Angeles interest rates on 30-year fixed-rate mortgages increased by 0.33%
- Los Angeles median home value sits at $921,495
- Foreclosure filings are steadily rising due to the 7.1% unemployment rate
- Investing Indicators are looking up for landlords with a price-to-rent ratio of 28.73
- Low Inventory of property to purchase with a 33.3% decrease in total active listings
- Decreasing Net Migration with more than 12% of the population moving out
- Increasing Prices in the Suburbs with median home value at $921,495
Low Inventory of property to purchase in Los Angeles
The last two years have been increasingly difficult for individuals and families across the country. The pandemic has brought forth an unemployment crisis that has made many hesitate to put their homes on the market.
Los Angeles home values have seen an increase by 15.9%
Over the past year, the economic situation has been increasingly difficult for many people and businesses worldwide. In Los Angeles, home values have shot up by about 15.9%, whereas rental rates have gone up 9.7%, mainly because of the steady decrease of listings on the housing market.
Despite the situation, it is expected that 2022 will see an influx of people looking to rent a property. Homes will not only grow more expensive, but we also don’t expect to see any new developments coming up anytime soon. From these statistics, we can forecast that those looking to buy property might be unable to do so, forcing them to rent instead. With the increase in demand seen in 2021, rent is expected to increase exponentially in 2022.
Los Angeles interest rates on 30-year fixed-rate mortgages increased by 0.33%
According to a report by Freddie Mac, the 30-year fixed-mortgage interest rate raised to 3.07 over the last few months of 2021. The 5-year ARM mortgage interest rate also went up by 0.09%.
An increase in mortgage payments is a significant concern for Los Angeles and the entire California housing market. With inflation rates shooting up, it is expected that mortgage rates will hike further for 2022. Over the past 17 months, mortgage applications have been steadily declining, mainly due to the affordable housing supply and increasing home prices.
Los Angeles median home value sits at $921,495
Since 2011, the median home value in Los Angeles has risen by approximately 129.7%. The increase was mainly brought about by the expanding economy and improving living standards for the consumers. However, the most significant increases were brought about by the COVID-19 pandemic.
Two years into the pandemic, property prices in the LA real estate market are currently shooting up mainly due to three primary indicators: lower borrowing costs, shortage of properties, and increasing demand. These three factors have increased LA home values by 33.1% since WHO declared the pandemic a global emergency.
In the third quarter of 2021, the California real estate market saw the foreclosure filings of more than 3,400 homes. LA had the most significant contribution of new foreclosure filings.Investing Indicators are looking up for landlords.In the wake of the COVID-19 pandemic, investment indicators forecast that the market will be favorable for investors’ long-term exit strategies. Higher acquisition costs and lower profit margins have created an environment where Los Angeles favors renters more than buyers.Another major factor favoring landlords in Los Angeles is the hefty real estate taxes for purchasing a home. In the wake of the pandemic, people are also looking for more flexible solutions to their problems, making the renting of property more favorable than purchasing.Decreasing Net MigrationThe Los Angeles, real estate market experienced a decline in its population in 2020 and 2021, and the declining trend is expected to continue into 2022. As home values in the country continue to rise, few people can afford to rent or buy homes in Los Angeles. From this, it is safe to anticipate that more and more people will opt to move out of LA in search of more affordable housing.Increasing Prices in the Suburbs
Since the beginning of the COVID-19 pandemic, the world has seen significant shifts in the way people live, interact and work. More and more people are now embracing the culture of working from home, which means that they do not necessarily have to live nearby their place of work. Due to this, workers are moving away from the city, searching for larger living spaces to create a dedicated workspace within their living space.
Without the need to commute daily, workers are flooding into the suburbs of LA city. However, Los Angeles has already solidified its position as a sprawling metropolis, which means that real estate prices in the surrounding neighborhoods are already high. In 2022, we can expect to see an increase in real estate prices in the outskirts of the Los Angeles metropolitan area and neighboring cities.