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Los Angeles Real Estate Market Update February 2022

Feb 2022 market update
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What’s happening in the LA real estate market in February 2022? We are going to answer that question today. We’re going to talk a little bit about what’s going on in the real estate market, which is changing a lot. It’s crazy, crazy, crazy right now.

If we look at and compare the number of houses that sold back in January of 2021 and compare it to January of 2022, there is a decrease of 34% in homes sold. There were 1,280 homes sold last January of 2021 and just over 800 homes closed escrow in January of 2022. This difference has caused increase in prices of homes on an average of just over 20% in the San Fernando Valley due to the complete lack of supply of homes for buyers.

So what are we seeing in the real estate market in February? Two (2) distinct things are happening – number one is the increasing of interest rates. By the end of December, we’re looking at the low to mid 3’s interest rates and now, it is around 4% to 4.25%. What does that mean for buyers? It obviously means higher monthly payments than it would have been in November and December of 2021. We are seeing buyers being slowly priced out especially at the higher price points.

At the same time, the lack of inventory is fueling our market right now. As an example, in 91326 zip code, there were only 13 properties for sale at the beginning of the year. Meanwhile, Chatsworth only had 21. Right now, we have 32 properties for sale in the 91326 zip code. That is still way under what we expect to have for this time of year. The listings are still in short supply and the demand is very strong.

“We are still in a seller’s market even though the interest rates are gradually increasing.”

To give you an idea of what is taking place, we are still seeing offers 10 to 15% over the list price despite the increasing interest rates. This numbers will play out over the course of the next 45 and 60 days as those properties close escrow. Homes are still sold over list price and get multiple offers. For homes that are over 1.4 to 1.5 million, still get multiple offers, but instead of 10 to 20 offers, there are only 3 to 5. This number is still great. Overall, we are still in a seller’s market even though a lot of buyers are being priced out and are taking a step back. We’re seeing, the lower, the price point, the higher the competition, we’re getting much crazier prices for the lower price point homes. As you start getting up to that middle upper rank home, there’s a little bit less competition.

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