By Jeffery Marino
There is no doubt that the coronavirus shutdown has slowed activity in the market for residential real estate. In March, the latest monthly data available, inventory in Northeast Los Angeles fell by 46% compared with a year earlier, while new listings fell by 21% year-over-year. The decreases indicate reluctance on the part of potential sellers to have their homes on the market at this challenging time.
The question now is whether prices will also fall. Here’s what we know:
At first glance, the March price data look solid, showing a 4.5% increase in home prices compared with a year earlier. However, most of the sales in March were of listings from February that cleared escrow and closed before the shutdown began in mid-March. For a clearer picture of how the shutdown has impacted home prices, we need to see the April data, available in mid-May.
Some things to look for: Since listings were down so dramatically in March, it’s all but inevitable that fewer homes were sold in April 2020 than in April 2019. Less inventory suggests higher prices for homes if there are plenty of potential buyers. But that’s a big “if” amid widespread unemployment.
The days and weeks ahead will be a time of watchful waiting. The one sure thing is that the economy, including residential real estate, is under tremendous strain.
Related content: Click here to see the Boulevard Sentinel’s monthly listing of home sales in Northeast Los Angeles.
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