Hey guys, Scott Himelstein with the Scott Himelstein Group, your Los Angeles Realtor here to provide you with the latest insights into the Los Angeles real estate market for July 2024. It’s been a while since our last update, so let’s dive right in and discuss the key factors influencing the market today.
Interest Rates: The Driving Force
Interest rates are the primary factor influencing the current real estate market. Recently, we’ve seen rates hover around 6.75%, a welcome decrease from the 7.5% we experienced not long ago. This drop has already sparked more activity in the market. To put things into perspective, back in February, rates were around 6%, then spiked again, but now they’re back under 7%. If you’re a seller, it’s crucial to consider buyers’ monthly payments, as fewer buyers are in the market compared to the days when rates were under 4%.
For instance, a client looking at a $775,000 home with 10% down would have a monthly payment, including principal, interest, taxes, and insurance, of around $5,300. Many sellers today have significantly lower monthly payments. With the median price for a single-family home in the San Fernando Valley at $980,000 and over $900,000 in LA County, the affordability challenge becomes evident.
Market Activity in Porter Ranch (ZIP Code 91326) Gives us Clues
Let’s take a closer look at Porter Ranch, ZIP code 91326, as it offers a diverse range of properties from townhouses and condos priced between $500,000 and $900,000 to single-family homes exceeding $4 million. Currently, there are 81 properties for sale out of over 13,000 single-family homes in this ZIP code. This number is up from 34 in February, indicating a shift in the market.
Of the 81 properties for sale, only 31 are listed at $1.5 million or less. When looking at pending escrows, there are 30 homes under contract, with 22 priced under $1.5 million. Recent closed sales since June 1, 2024, show that 41 out of 53 homes sold were under $1.5 million. This data highlights that while homes are selling, the majority are priced below $1.5 million, reflecting buyers’ sensitivity to higher prices.
Seller and Buyer Dynamics
The current market dynamics reveal that if homes are priced correctly, they often receive multiple offers. However, many potential buyers withdraw after counter offers, and approximately 40% of escrows fall through. This is largely due to buyers getting cold feet or being unable to afford necessary repairs on older homes. Sellers need to be flexible and willing to negotiate to close deals successfully.
Los Angeles County Market Trends
Examining broader trends in LA County, there has been a 27% increase in new listings year-over-year from June 2023 to June 2024. Active listings have surged by 35%, while pending sales have dropped by 22%. These shifts indicate a more competitive market for sellers who must price their homes correctly and make them as attractive as possible. Utilizing programs like our Concierge Plus, which allows for home improvements with no upfront costs, can be a game-changer in preparing homes for sale.
In summary, the Los Angeles real estate market in July 2024 is marked by fluctuating interest rates, a steady influx of new listings, and a competitive environment for both buyers and sellers. For buyers, now might be a good time to act as interest rates are currently favorable, and waiting could mean facing stiffer competition if rates drop further. For sellers, presenting a well-staged, competitively priced home is key to attracting offers.
If you have any real estate questions or need assistance, feel free to leave a comment below or contact us directly at 818-396-3311. Thanks for tuning in to this market update!
