Blog List >  Mortgage rates matter but lack of inventory matters more
Mortgage rates matter but lack of inventory matters more
Jul 18 2018 2:12PM Posted by Pacific Union, JUNE 2018
 
FROM OUR COMPANY CHIEF ECONOMIST, SELMA HEPP


  • May home sales slowed across all price ranges compared with last May, though an earlier buildup in higher-priced sales has kept overall 2018 activity higher than last year.
    • Northeast L.A. and Mid L.A./Baldwin Hills continue to benefit from strong higher-priced sales.
    • After a busy April, sales of homes priced between $2 million and $3 million slowed.
  • Inventory was 24 percent below last May, with supply in all price ranges falling notably. 
    • Inventory priced below $1 million fell by 20 percent to 50 percent across all neighborhoods.
    • Only a few neighborhoods saw some growth in higher-priced inventories, with $1 million-to-$2-million increases in Northeast L.A., $2 million-to-$3 million increases in Malibu and the West Valley, and $3 million-plus increases in South of 210 and the East and West Valleys. 
  • The median home price grew by 11 percent from last May. 
    • May’s median home price growth was most notable in the Eastside, up by 27 percent, without pressure coming from higher-priced sales.
    • Prices in Silicon Beach/Marina/Airport increased by 24 percent, while prices in Downtown L.A. were up by 20 percent. 
    • Beverly Hills is the only neighborhoods with a lower year-to-date median price, mostly due to lower sales activity in the $2 million-plus price range.
  • Buyer fatigue is showing for homes priced between $2 million and $3 million, with price reductions of sold homes up by 8 percentage points from last year.
    • Homes sold at a faster pace than last year, in a median of 28 days.
    • Homes priced between $1 million and $2 million now generally sell in 25 days, faster than those in other price ranges.
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