Is This a Housing Market, or a Soviet Grocery Store?

The housing market in the LA area is looking like a Soviet grocery store to a lot of buyers right now: Empty shelves and a lot of hands grabbing for what’s there. And while it’s true that the inventory is down sharply, there are still gems that are being listed. The only problem is that you have to act fast to get them, since a lot of them are going pending within days, often after a brief but ferocious bidding war.

The data below are the main trends for the City of Los Angeles, but you can see the housing market data for the entire LA area here.

The perfect storm for sellers in LA

Buyers? They’re definitely hungry in LA. March saw a 24.6% spike in home sales from February, making it one of the most active months in the last year for home sales.

Sellers? The extraordinarily few home sellers out don’t have to worry about much competition. Inventory in the city of LA in March was down 16.7% from February, and down 38.7% from last March. That’s the lowest we’ve seen in the last year. When you combine the fast pace of sales with the low number of homes for sale, we’re seeing a lot of competition, bidding wars, fast sales and frustrated buyers.

In fact, of LA-area cities with more than 100 homes for sale, only one showed monthly growth: Inventory in Beverly Hills grew 0.4%, from 263 homes for sale in February to 264 homes in March. Even still, inventory there was down 29.8% year over year.

Prices stay put

Even with the increased demand, buyers aren’t ready to pay much more to buy a home in the LA area. The median single-family home price is up 5% month over month, and 0.6% year over year to $355,000. Condos moved a bit more, with a median price increase of 5.5% month over month to $290,000. If the inventory freefall continues, buyers will have to make a choice: Offer more money, or stay on the sidelines.

Median Homes Price in Los Angeles

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  • MN

    and this blog is written by a RE agent…

    • Sickofit

      I'm a RE Broker but there is so much self-serving propaganda in an attempt to incite a feeding frenzy that caused the bubble to burst in the first place. It's sickening. It would be nice if RE personnel would act with some sense of dignity and class and perhaps like the “professionals” they claim they are.

    • Lbolard

       This is as brutally stupid as it is greedy. Indeed, it fits the $122,000 mark -up on this listing.
      Yeah, they- as of banks, Wall Street, real estate agents and city governments- want all to believe there is shortage of houses available and people are fighting for them.

      There is another 4 million coming in, all foreclosures.

      Wages have falln 4% in the last 12 years. There is no reason to be scammed by greedy, liers pretending to be on your side when the only side they know is their profit.

      We should all bond together and offer always at least 10% less than they ask, it would be good for us and the economy.

  • truthsayer

    You'd have to be nuts to buy into LA at these inflated prices.  Rent and pocket the difference.  Less headache, and more cash in your pocket.  That the LA way!

    • JohnnyJ

       Difference – google rental costs and availability in the southland.  In many many areas that's not necessarily true.

    • YourLandlord

      That's exactly what I do. I rent to people like you and pocket the difference.

  • Ferps

    Banks have control over most of the inventory of houses in this market. And they are going to sit on properties for a decade, if that what it takes to keep prices from falling.

    • Smartman

       most of?  Not really. 

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  • VRL

    The analogy is off. This is the tranquility before the FLOOD Of Foreclosur​es Hits The Housing Market

     Here is an article from CNN money
    04-17-201201:54 PM – last edited on 04-17-201201:56 PM
    NEW YORK (CNNMoney) — The golden age for foreclosure squatters may soon be coming to an end now that the $26 billion mortgage settlement has been approved. The settlement, agreed to by the nation's five largest mortgage lenders, is expected to speed up the foreclosure process by providing stricter guidelines for the banks to follow when repossessing homes.The banks involved include Bank of America (BAC, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Citibank (C, Fortune 500), Wells Fargo (WFC, Fortune 500) and Ally Financial. Many foreclosures have been in limbo since fall 2010 following the so-called robo-signing scandal, when banks allowed employees to sign off on thousands of foreclosure documents a month with little verification. Lenders hit the pause button on foreclosures because they “were afraid that anything they did would be under a microscope,” said Eric Higgins, a professor of business at Kansas State University. As a result, borrowers who were seriously delinquent on their loans have been able to stay in their homes for months or even years without making a single payment. Nationwide, the average time it takes to foreclose on a home — from the first missed payment to the final bank repossession — stretched to 370 days during the first quarter, almost twice as long as it took five years ago, according to Daren Blomquist, the marketing director at RealtyTrac.Foreclosure free ride: 3 years, no mortgage payment In some states, delinquent borrowers have been squatting in their homes much longer. In Florida, the average time was 861 days, and in New York it was 1,056 days — close to three years. “Perhaps a million foreclosures could have been pursued last year but weren't,” said Rick Sharga, executive vice president for real estate investment company, Carrington Holdings. But that's all about to change, he said. “We're going to see an increase in the speed of foreclosures and a higher number of foreclosure starts.” In fact, there are indications that the pace of foreclosures are already starting to pick up. While overall foreclosure activity was down during the first quarter, filings were up 10% in the 26 states where foreclosures must undergo court scrutiny, according to RealtyTrac.It was in these judicial states that the processing of foreclosures slowed the most following news of the robo-signing scandal, said Blomquist. Many banks in these states stopped filing foreclosures unless they were extremely confident it would pass muster in the court. (In non-judicial states, foreclosures are reviewed by a trustee, which is a third party such as a title company and less likely to parse every legal document). But now lenders can move more confidently, said Brandon Moore, RealtyTrac's CEO.In the judicial state of Indiana, for example, foreclosure filings were up 45% year-over year. And in Florida, they were up by almost 26%, according to RealtyTrac.The $26 billion crapshoot “The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen — both in terms of new foreclosure activity and new short sale activity,” Moore said in a statement. The resulting flood could bring home prices down even further — yet another impetus for the banks to clear out their foreclosure pipeline as quickly as possible, said Kansas State's Higgins. Then, industry thinking is, the housing market would be able to get back to normal and home prices could eventually find their true value. Some industry analysts, such as the chief economist for listing site Zillow, Stan Humphries, are predicting that could happen as soon as the end of the year. Zillow estimates that home values nationwide will fall another 3.7% by the end of 2012, and that price will likely bottom out by early 2013.Foreclosures: America's hardest hit neighborhoods Should home prices hit a bottom then stabilize, it would push many potential buyers off the fence, according to Mike Fratantoni, a vice president at the Mortgage Bankers Association. House hunters would no longer be afraid of investing in assets that were losing money. “The market is already on the verge of turning the corner on prices and this will help,” said Fratantoni.  

    • Smartman

        When are you going to give in and just buy in Redlands?

  • CulverCityRenter

    Here's one buyer that is most definitely frustrated, and most definitely sitting on the sidelines.  This feels like 2005-2006 all over again. There's no way I'm getting into a bidding war after all the crap we've learned over the past 10 years.

    • linda

       Culver City- it's just like that. And again, they hope to hike the prices sky hike and the hell with consequences.

      The problem with renting is that the rent doubles in about 8 years, sometimes as little as 6.

  • hyperhips

    I am reluctant to invest in LA. As sick as I am of my lazy, cheap landlord. I ma saving my money and waiting.

  • Seth

    Did anyone actually think the bottom would never come? That's just as unreasonable as the people who thought the last upswing would never stop. The markets run in cycles. BUY AT THE BOTTOM!!!!!

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  • diaph

    obviously, the economy is being goosed by the administration prior to the election.  the fact that inventory is low but prices aren't rising is a tell-tale sign that things are not what they seem.  why aren't prices rising if there is so much demand?  because people don't have the money to pay more.

    and why is that?  ”it's the economy, stupid”.  where are the jobs?  the new lower applications for unemployment insurance figures are because people are instead declaring “permanent disability” at an unprecedented rate, putting them on the gov't dole for life.  supported by you and me, natch.  is this a way to power up an economy?

    certainly, there is pent-up demand for housing.  everyone would like to own their own home–the American dream.  but if you are under 35 with kids to send to college in a few years, maybe you should set your priorities straight.

    meanwhile, when the election is over, come next january, things will be looking mighty bleak and prices will continue to descend until there are new good jobs created.

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  • Ojai

    If a new wave of foreclosures hits the market it will depress prices of course. The problem is that those homes have been sitting there without maintenance, sometimes vacant, and most will be in terrible condition. 
    In my area there are not enough quality homes on the market, most of what I see is in poor condition and overpriced. It took me a year to find something worth buying and renovating. I was actually shocked (disgusted?) looking at what was on the market for sale. I think there is a market for good quality homes that can be bought as primary residences, or as rentals to working class people, at least in some areas. Obviously there are problems in Las Vegas, Phoenix and parts of Florida, where builders and flippers went particularly nuts during the last run-up.

    • diaph

      many of those foreclosed homes being held by the banks, sold during the bubble, were rehabbed before the last buyer purchased.  many aren't in bad shape after a couple of years without maintanence.  of course, each prop is different, but i wouldn't be pessimistic about buying a foreclosure if the price was good.  in other words, significantly below market price to allow for the repairs and the hassle…

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  • Deb

     i wouldnt go that far to say most.

  • daytonanorris

    We have the same thing going on here in reno, in fact we only have about 600 houses on the market right now compared to ur usual 2500-3000!