What Happened in Los Angeles Construction in 2020 plus 2021 Predictions?
Based on a recent report, home sales in Los Angeles dropped by 3.9% starting July of 2020, but their high prices remained constant. Thanks to the coronavirus which has rendered many people jobless, and negatively affected many businesses. According to a journal, the trend will continue, where a decline of both prices and home sales volumes will get experienced. A consistent recovery may not get noticed until 2022-2023.
This article will offer you a detailed analysis in Los Angeles’ real estate business to help you with information to rely on in your construction business during this COVID-19 pandemic. Realtor reports that Los Angeles’ real estate market got balanced in August 2020. People were buying houses at the asked price, though the buyer turnout was low.
Each year, Los Angeles, CA median homes’ list price went up at 5.5%. Per square foot, the median listing price was $548, and $821 median sale price. It means that the buyer was comfortable buying a house at 90% of its asking price, and the sellers were great in closing the deals. Generally, when a home is in the Los Angeles market for sale, it takes approximately 56 days to sell it, but these median days have declined this year.
Los Angeles Housing Trends and Prices in 2020
With approximately 4 million people, Los Angeles is California’s largest city and envy for many. It’s among the hottest estates to live in around the nation, making the market very prime. It is the main target for both homeowners and investors. Though it’s the nation’s most expensive housing market, it is worth investing. The long-term benefits of acquiring a home here are many. When you want to dispose of the house in future, you get guaranteed your money back plus some good profit.
Data from experts indicate that the popular housing units found in Los Angeles are spacious one-bedroomed and two-bedroomed apartments. People also prefer duplexes, detached homes ideal for a single-family, rowhouses, and apartments converted from homes.
40% of the housing units found in Los Angeles are single-family homes, where their prices increased by 4.9% by the beginning of this year.
How Did COVID-19 Impact the Housing Market in Los Angeles?
It is a no-brainer; the shutdown due to the coronavirus pandemic has affected not only the Los Angeles’ real estate but also the entire construction industry in California. Compared to March 2020, home sales decline at 26.6% in April. Comparing to 2019, the metro housing market of Los Angeles has gone down by 30.9% as stated by realtors. The sales for the single-family homes dropped by 30.6%, while the median selling price rose by 3.9%.
In March 2020, the Los Angeles’ median sold price declined by 0.5%, while the sales went down by 15.5%. In the same month, the single-family homes’ median sold price increased by 0.5%, while their sales declined by 48.1%. By June 2020, their sales have reduced by 19.3% compared to June 2019. Their active listings too went down by 44.9% compared to 2019, but their median price rose by 1.8%.
Los Angeles’ Housing Market Report as By August 2020
- Sales for the single-family homes declined every year by 5,2%
- Increase of the median price by 7.9%
- Every year, the active listings went down by 34.3%
- The median market days have declined to 13
The Los Angeles 2021 Construction Market Forecast
Most homeowners and investors are wondering what to expect of the real estate industry in 2021. Based on the past price trends of Los Angeles’ housing market, the median home price has been appreciating every year. When comparing to last year, prices increased by 7.4%, with 2019 being the last of the seven consecutive years that home prices have increased. Based on Zillow’s believes, home values in Los Angeles will increase by 5.9% within 2019.
Based on statistics of the last ten years of the real estate appreciation, the rate increases by 6.34% annually. Los Angeles falls under the top cities that enjoy 10% of the national real estate’s appreciation. The city’s recent appreciation was approximately 5.23%, where it experienced a 1.28% increase in the last three months. It is in align with Zillow’s prediction. Prices may go up by 5% in 2021.
Conclusion
It is evident how COVID-19 pandemic has affected the construction industry in Los Angeles. But it may be an advantage to both the buyer and seller based on their side of the fence. The stay at home rule froze the market because most homeowners had to remove their listed homes from the market. The result was a major flop in home sales.
For the investors, they find the opportunity ideal to buy properties in Los Angeles because the demand is low, which in turn lowers the price. With the easing restrictions, the need may go up, triggering the prices to go high. But with more houses listed for sale, the prices may also go down.