By Jeffery Marino
In theory, rising interest rates should dampen home prices. But in Northeast Los Angeles, the residential real estate market is surging ahead even as mortgage rates rise.
The median sale price for a home in NELA rose to $1.19 million in March, the latest month with comprehensive data. That’s $65,000 more than in February and 26% higher than in March 2021. The last time the market saw annual price increases of that magnitude was May 2014, when the median sale price for a home in NELA was $550,000.
Home prices are being held aloft by strong buyer demand for a dwindling supply of homes. In March, the number of homes sold fell for the seventh straight month, down 11% compared to March 2021.The inventory of homes for sale was down by 40% year-over-year.
If anything, the combination of rising rates, rising prices and scant supply have lit a fire under buyers.
In March, a home for sale in NELA was on the market for 32 days compared to 41 days-on-market in March 2021. And on average, buyers paid 11% more than the asking price to seal a deal in March, a record premium in data going back to 2011. To compare, the average premium-over-ask in March 2021 was 5%.
If you own a home in NELA, your net worth is rising. If you sell a home in NELA, you’re in the cat bird seat. If you buy a home in NELA, you’re going to have to pay up. If you’re a renter, you’re looking at market conditions that could hardly be tougher for making the leap to home ownership.
I’ve never understood the comparison of “sold” price to “asking” asking price as the asking price cannot be assumed to have ANY relation to the actual “fair market value”. It’s ludicrous, and meaningless
Realtors who sell a lot of houses in this area tend to list them at lower than market value, then they get a ton of interest and are bid up, often by hundreds of thousands.