By Jeffery Marino
Despite the economic turmoil of recent months, homebuyers in Northeast Los Angeles have remained willing to pay top dollar for a house. The median sale price in NELA in May was $893,000, representing a steady if unspectacular upward slope in prices over the past 12 months.
But that doesn’t mean that the pandemic is leaving residential real estate unscathed.
The number of homes sold across the northeastern region of L.A. continued to crater in May, when 158 homes changed hands compared to 250 homes in May of 2019 – a drop of 37%.
The decline in home sales reflects a similarly steep decline in the inventory of houses for sale. Put another way, fewer homes were sold in May because there were fewer houses for sale. With supply tight, buyers paid up for what was available.
The combination of low supply and high demand predates the pandemic. But before the pandemic, low supply was due to a dearth of new construction in single family homes in L.A. In recent months, superlow inventory is largely due to the reluctance of potential sellers to put their homes on the market during the pandemic and resulting recession.
Supply is not likely to increase anytime soon. New monthly listings of homes for sale declined in the spring in each of the neighborhoods tracked by the Boulevard Sentinel. This suggests that supply will remain constrained – and prices high – in the summer. But that could change if buyers start to balk at today’s high home prices, which is a real possibility if pandemic-related setbacks in jobs and investments persist.
Like everything else in the economy, the path ahead for real estate depends on the path of the virus.
Click here for the latest details on individual single-family home sales in NELA and nearby communities.
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