By Jeffery Marino
Ever since interest rates began to rise in March, home sellers and home buyers alike have been looking for signs of a housing-market slowdown.
In Northeast Los Angeles, those signs are unmistakable in data for August, the latest full month of statistics.
Price growth slowed abruptly in August, with prices rising 10% year-over-year, compared to annual increases around 20% in the prior 12 months. The median sale price for a house in NELA declined in August to $1.15 million from $1.25 million in July.
As the market slows, potential buyers are holding off putting their homes on the market, making an already tight market even tighter. Inventory declined 23% in August year-over-year and new listings were scarce.
In the past, tight supply in NELA has led to bidding wars that drove prices ever higher. In the August data, however, price growth slowed amid tightening supply, suggesting that buyers are close to hitting the top of what they can afford.
Problems with affordability can also be seen in the sale-to-list ratio, which measures the average price paid above asking. In August, the ratio was 109%, the lowest premium recorded since January.
Even the lightning speed with which houses sell in NELA, usually a sign of a strong market, could be a sign of weakening. In August, the median days on market was 29, which is 5 days faster than August of last year. But faster sales combined with a falling sale-to-list ratio indicate that sellers are accepting offers without too much dithering.
