“How expensive?” tracks measurements of California’s totally unaffordable housing market.
The pain: The cost of homebuying is so insane that Los Angeles County’s sales are running at the slowest pace in records dating back 37 years.
Source: My trusty spreadsheet looked at two-year periods of sales from CoreLogic stats stretching back to 1988 to measure how much the local housing market has chilled. Remember that in March 2022, the Federal Reserve began its war on inflation using higher interest rates. Those moves essentially doubled mortgage rates to the 7% range.
The pinch
Only 107,772 Los Angeles County residences were sold in 24 months ended in April 2024, the slowest two years since 1988. This was the ninth-consecutive month a new sales low was reached.
April’s homebuying pace is 43% below the 37-year average. It’s also 18% less than the pre-pandemic sales low of 130,683 in May 2009 – in the middle of that era’s global financial crisis.
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Affordability is the current culprit. Only 14% of Los Angeles County households have the financial strength to qualify to buy, according to California Association of Realtors’ estimates.
Mortgage rates at 20-year highs plus stubbornly high prices killed many house hunter dreams. CoreLogic’s April 2024 median of $865,000 is up 1% in the past 2 years after 37% gains in 2020-22.
Regionally speaking
It’s equally slow across the six-county region.
Only 357,486 Southern California residences were sold in 24 months ended April 2024, the slowest two years on record and the sixth-consecutive all-time low.
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Sales in the region run 33% below the 37-year average and 10% less than the pre-pandemic sales low of 399,178 in March 2009.
It’s no help that April’s median of $760,000 was up 1% in the past two years after 38% gains in 2020-22. Thus, more affordability headaches: just 15% of Southern California households can qualify to buy, according to Realtors’ math.
Postscript
How can some observers call this a hot market? Well, while a slim number of houses sell, the ones that do sell seem to go quickly.
California Realtor stats show LA single-family houses lasted only 22 days on the market in 2024’s first four months, 11 days faster than the average sales speed since 2000.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
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