Hope you are starting the New Years on the right foot! The real estate market is starting extremely strong this year and not follow normal market cycles.
What is causing real estate to be so strong?
Inventory is extremely low
Nationwide housing inventory dropped below 700,000 active listings. 36.9% fewer listings than last December 2019. Locally (Los Angeles County) dropped to its lowest point 10,816 active listings in December.
Interest Rates at all time lows
Mortgage interest rates closed at 2.65% last week for 30-year fixed-rate loans, based on the weekly report from Freddie Mac. This is only 1 basis point higher than the all-time low record. The low-interest rates help buyer’s purchasing power, which buyers are using to drive the home prices up.
Demand is high
The demand has steadily increased and not following traditional trading cycles. The real estate market typically slows down in the winter but this is not the case this year with 13,223 closed transaction sides in December 2020. A sharp increase compared to last December 2019 with 10519 transaction sides closed and 2018 with 8854 sides closed. You can also see buyer’s urgency and the increased demand with low median days on market in LA county. December 2020 median days on market was down 50% from the previous December with a total of 12 days on market.
Prices are up!
All of these factors have created bidding wars driving up the prices. Los Angeles County median sales price was up 12.3% for December 2020.