Our Los Angeles year opens with sunshine after a rainy Christmas holiday season...rain that was much needed for Southern California, leaving our city nicely rinsed and even more beautiful when the January sun began to shine. The heavy snow pack that fell in the Sierra offers hope that if additional snowfall arrives, we may have less worry about drought conditions in Summer and Fall 2022.
Market conditions barreled into the holiday season with bluster and incredible volume of activity. In December our team closed 17 transactions with approx. $59,000,000 in sales value. It was a record month for activity across the Southland.
Southern California median prices have risen 16% year over last year --- but an important twist to know is that the highest price rise is occurring outside of LA County, in less costly surrounding counties such as Riverside and San Bernardino. In short -- the suburbs are booming while Los Angeles city is cooling off in numbers. LA County rose only 12.6% --- still a noticeable rise, but less increase than outlying areas.
In our Luxury Market sector, agents report less multiple offers than a year ago, and slower pace for upper priced trophy homes than last year. This does not yet point to prices being lowered across the board, but Buyers gained a better negotiation foothold in the 4th quarter of ’21.
Home prices will likely hold stable for the next year, given that there remains a shortage of available homes. Analysts tell us the USA is short 5 million homes for available Buyers! With supply chain delays in construction, this high demand situation will not disappear soon. City government is greenlighting higher density on single family lots to accommodate the housing needs. This has created serious debate as citizens are confronted with the possibility of multi-family housing being approved in quiet residential neighborhoods. Most popular among new regulations is the “ADU”, Accessory Dwelling Unit, which allows for a 2nd residence on a single family lot, essentially a Guest House, in order to accommodate the demand. Only time will tell ... and we will be watching.
-Ernie
