By Jeffery Marino
A small, really small, sliver in the most recent data for residential real estate sales in Northeast Los Angeles indicates, perhaps, that the leaps-and-bounds increases in NELA home prices may be slowing down.
Here are the clues:
Home prices continued to rise in NELA in July, the latest full month of data, hitting a median sale price of $1.025 million. That price tag represents a 15% year-over-year increase – the sixth straight month of double-digit price increases in NELA.
However, on a monthly basis from June 2021 to July 2021, prices rose by just half a percentage point. At that pace, the annualized price increase going forward would be 6%, less than half the 15% year-over-year price increase from July 2020 to July 2021.
Another clue: Home sales in NELA in July continued to outpace new listings of homes for sale, as evidenced by the overall shrinking inventory of homes for sale. That means that the number of houses sold exceeded the number of houses put up for sale, a dynamic that leads to higher prices.
And yet, 11 fewer homes were sold in NELA in July 2021 than in June 2021, a 3% slowdown in the velocity of sales, despite the rise in new listings. Moreover, in July, home buyers paid a 9% premium over the asking price compared with a 10% premium in June. It was the first time since January that the premium-over-ask has declined — an early sign, maybe, that buyers are beginning to reach the outer limit of what they’re willing to pay.
A few month-to-month downticks in the market’s torrid pace do not a trend make. But in a market where sales and prices have gone up so much, so fast, for so long, any pullback is worth watching.