By Jeffery Marino
In April, the first full month of the coronavirus shutdown, the local residential real estate market was down, but not out.
The latest available data, out now from Redfin, show both home sales and inventory slumping dramatically last month in Northeast Los Angeles. However, houses that did sell went for top dollar, with the median sale price across the northeastern L.A. region rising to $900,000, a 6% increase over April of last year. The median days-on-market in the region was 34, three days faster than last year.
Mixed signals are not unusual in times of economic shock. Some people react to immediate circumstances, hence, the sharp decreases in sales and inventory as potential buyers and sellers opt to wait out the current hard times. On the other hand, some people are undeterred – especially those closing in on a long-range goal like buying a house; hence, the willingness of April’s buyers to pay high prices that have become the norm.
The question now is whether home prices will remain firm in May and beyond. On that question, the April data do not point in a clear direction.
Consider: The strong price growth in NELA in April was based on a relatively low number of sales, so it’s a less reliable indicator of strength than in a market where many homes are changing hands. Moreover, price growth was not uniform across NELA’s neighborhoods. On a year-over-year basis, prices rose last month in Highland Park, Glassell Park, and El Sereno and fell in Eagle Rock, Elysian Valley and Mount Washington.
That said, in the three NELA neighborhoods where prices declined, the average sale-to-list ratio – a measure of how much buyers paid relative to the asking price – was greater than 100%. That means buyers were still bidding up prices, a sign of the desirability of NELA real estate, even in this time of coronavirus.
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