Today, we’re diving deep into the real estate rollercoaster that was 2023 in Los Angeles and taking a sneak peek at what’s in store for the thrilling year ahead, 2024.
So 2023 kicked off with a fervent real estate market in Los Angeles. Buyers were in fierce competition, and property values seemed to be reaching for the stars. From January to June, we witnessed property values skyrocket, with neighborhoods experiencing increases ranging from 13% to a staggering 15% in just six short months. However, as we cruised through the middle of 2023, an unexpected twist occurred. Interest rates spiked, soaring from approximately 6% to over 8%. This sudden rise had a chilling effect on the real estate market, resulting in a slight decline in home values towards the end of the year.
As 2023 came to a close, the Los Angeles real estate market found itself in a unique stalemate. Higher interest rates left buyers hesitant, and potential sellers were reluctant to list their properties, fearing they’d have to buy at a higher rate. Towards the end of 2023, a glimmer of hope emerged as interest rates started to come down. As predicted, this led to a frenzy among buyers eager to re-enter the market. The result? A nearly 30% decrease in inventory in LA County since November. Multiple offers and homes selling significantly above the list price became the norm.
What can we expect in 2024? It’s an exciting time for both buyers and sellers. With expectations that the Federal Reserve will continue to cut rates, we anticipate even more buyers jumping off the fence and entering the market. As rates approach 6.5%, sellers with 4.5% or 5% interest rates are willing to give up that lower rate for a chance to secure a home that meets their needs such as searching a larger property for the family or downsizing.
If you’re a prospective buyer, now is the time to get your ducks in order. Waiting for rates to drop further means dealing with fiercer competition. The window of opportunity is narrowing, so be prepared to make your move swiftly. In 2023, only about 3.8 million homes were sold nationwide, a significant drop compared to 6.8 million in 2019. However, 2024 is expected to see an increase of around 20% in sales as some sellers decide to let go of their lower interest rates. But inventory is expected to remain limited throughout the year.
If you’re considering selling, especially if you’re downsizing or looking for a larger home, consider advancing your timeline. Avoid the future competition that’s on the horizon.
Southern California’s Unique Outlook: Nationally, home prices are predicted to increase by 2% to 5%. But here in Southern California, we’re looking at a different story. With intense competition and high demand, we forecast a robust 10% to 12% increase in home prices. People are eager to transition from renting to owning, even with higher prices and rates.
If you’re looking to buy a home, the time is now. If you’re selling, seize this opportunity to control the market and minimize concessions. For any real estate questions or assistance, don’t hesitate to reach out to myself, Scott Himelstein, your Los Angeles Realtor at 818-396-3311.
