Los Angeles may be filled with stars, but right now its housing market isn’t one of them. After benefiting from robust investor interest for the past few years, home sales and prices are beginning to deflate. It is now taking significantly longer for sellers to get a contract.
“The real estate market in Los Angeles is going back to a time where properties sit on the market possibly for four to six months, instead of flying out the door within 10 days and being sold,” said Greg Bender, a local Realtor with Berkshire Hathaway HomeServices.
Sales of existing homes in Los Angeles were flat in September compared to August and down nearly 2 percent from a year ago, according to the California Association of Realtors. The median price of an L.A. home sold in September was $486,030, 5.9 percent lower than in September 2013. Homes are now sitting on the market an average 45 days, compared with just 33 days a year ago. This, as the number of for-sale listings rises.
“Buyers don’t have the same sense of urgency as they did before. They can be a little bit more discerning,” Bender said.
Much of the slowdown from last year is the sharp drop in investor activity in the market, due to fewer distressed properties for sale. Twenty-three percent of homes sold in Southern California in September were to absentee buyers, mostly investors, according to DataQuick, a California-based real estate analytics firm. That is the lowest level in four years. The peak of investor interest was in January 2013, when just over 32 percent of buyers in the market were investors. All-cash buyers are also waning, leaving the market to mortgage-dependent shoppers, who are facing still-tight credit conditions.