Housing Trends in Los Angeles, CA: Market Prices, Trends, Forecast and more

Overview of Los Angeles real estate market

The Los Angeles housing market is currently being influenced by the introduction of COVID-19 and the resulting pent-up demand and historically low interest rates. Despite the pandemic’s negative effects, it has opened up a window of opportunity for those looking to buy, sell, or invest in the market. Currently, the median home price is around $941,000, which is a 5.9% decrease from last year. Homes on the market are typically selling for 3% above list price, and the number of new listings has decreased by 22.4%. The Association For International Real Estate Investors (AFIRE) has ranked Los Angeles as one of the top three cities for global investors to increase their investment exposure. Moving forward, the Los Angeles housing market is forecasted to continue pacing national trends and is expected to remain attractive for buyers, renters, and investors alike.

What influences the housing trends in Los Angeles?

1. Population Growth

The population of Los Angeles has been steadily growing, with an accompanying increase in the lifestyle of the area’s residents. This population growth has had a direct effect on the local housing market, with a rise in demand leading to an increase in housing units being created. This in turn has caused a surge in real estate prices, as well as an increase in rental rates in the area. Therefore, it is evident that population growth has a significant impact on the housing trends in Los Angeles.

2. Property Prices

The property prices in Los Angeles have been influencing the current housing trends. As the prices of properties have increased, so have the prices of homes, with many properties becoming overpriced. This has caused a decrease in the city’s real estate values, which have dropped by 20 percent since their peak last spring. However, due to this overpricing, sellers are now slashing their prices in order to move the properties off their books and stimulate purchases again. As a result, the median sale home prices in Los Angeles have decreased, while the median listing home prices remain at $2. This has created a situation where accurately priced homes will stay priced where they are, while the overpriced homes that have been overvalued will drop to a more reasonable pricing.

3. Supply and Demand

The primary factor affecting the supply and demand for housing in Los Angeles is the housing inventory. With a very small housing inventory in the market, the demand for the few available properties goes up, driving prices higher. Additionally, anxiety in the market caused by people’s perceptions of what the market will do can also bring down demand and slow down the economy. Finally, illiquidity caused by high amounts of debt can make it harder for people to purchase new homes, reducing the demand and causing a softening of the market.

4. Economic Conditions

The economic conditions that influence housing trends in Los Angeles are primarily driven by consumer sentiment, market uncertainty, and affordability. Anxiety in the market is often caused by people’s perceptions of what the market will do in the future, and this leads to slowdowns in the economy and an opportunity for buyers to get good deals. The consumer confidence index has dropped 5 points to 65 and most people do not believe that economic conditions will improve, which has resulted in fewer buyers in the market. Unemployment rates are likely to rise and tech sector profits are down, further decreasing the number of potential buyers. Home sales and prices have both been decreasing for the past several months, with the median home price dropping to $774,580. Similarly, condo sales are down, with a big price drop as well.

5. Housing Stock

The housing stock trends in Los Angeles are heavily influenced by a variety of factors. To begin with, the California Association of Realtors’ housing consumer index fell 5 points to hit 65, indicating that many people believe it is not a good time to buy. This has contributed to decreased demand for property and an overall slower housing market in the region. Additionally, the lack of available land to build on has caused most developers to pass the higher cost of land acquisitions on to buyers, making it more difficult to find affordable housing. Furthermore, California’s high property taxes add further strain on the market, further limiting access to affordable housing. Finally, remote work during the pandemic and the relocation of several large tech companies has caused an exodus of people away from the region, leading to a decrease in available housing stock. All of these factors have combined to create a challenging market in Los Angeles, with decreased demand and fewer homes available for sale.

6. Amenities

The lifestyle and amenities of a neighborhood can have a significant impact on housing trends in Los Angeles. The availability of housing units, the quality of food options, and the overall walkability of a neighborhood can all affect the attractiveness of an area to prospective residents. The availability of housing units in a particular area can determine the availability of housing options and the price range of those options, while the quality of food options can influence the desirability of the neighborhood. Finally, the walkability of an area can contribute to the overall livability of the neighborhood. All of these amenities can be deciding factors in the popularity of an area and in the desirability of housing in that area.

7. Neighborhoods

Over the past few years, the housing market in Los Angeles has seen a steady growth. In recent years, the number of housing units in the city has increased significantly, with more and more people looking to move to the area. The average home price in the area is also on the rise, making it a desirable location for those looking for a home. Additionally, the walk score in Los Angeles neighborhoods has also been increasing, making it more easy and convenient for people to get around. This all adds up to create a favorable housing market in the area that is attractive to potential home buyers.

8. Construction Activity

The construction activity in Los Angeles has had a direct effect on the housing trends in the city. After the 2008 recession, the number of construction jobs in Los Angeles gradually regained numbers and fully recovered just before the job losses of the 2020 recession. This resulted in the increase of housing units and created unmet demand for housing. With the increase in housing units, the number of employed real estate professionals also rose, cresting pre-2008 recession levels in 2016. However, in 2020, both industries experienced a hit to job numbers due to reduced transactions, leading to a decrease in housing units and lower home prices. As a result, the housing trends in Los Angeles will not likely experience a sustained increase until the next influx of buyers and renters in the years following 2025.

9. Neighborhoods with Rent Control

The housing trends in neighborhoods with rent control are changing significantly in Los Angeles. Years of appreciation have led investors to prefer rentals over flipping, and the city of Los Angeles alone has more than 600,000 apartments spread across 118,000 properties. In late 2019, California became the second state to pass a statewide rent control law, which covers all multi-family rental units built more than 15 years ago. This law applies on top of any stricter local ordinances, meaning that rent control applies to Los Angeles rental properties if they are multi-family units. Meanwhile, homeownership rates in California have been declining for years, as a greater number of middle and upper-class residents have chosen to rent instead of purchase. This is not only driving demand for the luxury Los Angeles real estate market, but also introducing more renters to the Los Angeles housing market thanks to military bases, defense contractors, and other sources. Therefore, the current trend in rent control neighborhoods is one of increased rental demand and higher prices, making them some of the best candidates for long-term real estate investments.

10. Population Growth and Demographics

Population growth and demographics in Los Angeles are influenced by a variety of factors, including the housing market, world and national economic and political conditions, lifestyle choices, education levels, and the elevation of the city. The city has an average of 51% female/male and an average age of 40 years old. About 42% of residents have a college degree and 87% have a high school diploma. Average household earnings are $117K and 12% of the population lives in poverty. The elevation of Los Angeles is 586.96 feet and the tree coverage is 7%. All of these factors can have an effect on population growth and demographics in Los Angeles.

What are the typical house prices in Los Angeles?

1. Beverly Hills: $3 million

The typical house prices in Beverly Hills, Los Angeles are quite high, with a median listing price of $3.3 million and a median listing price per square foot of $1.1K. This is significantly higher than the median listing prices of other neighborhoods in Los Angeles, such as Westwood ($1.7M), Woodland Hills ($1.3M), and Encino ($2.1M). Additionally, the median ZHVI in Beverly Crest is $3,201,351, and the median ZHVI for Beverly Hills Gateway is $11,988,461, both of which are substantially higher than other neighborhoods in the area. This shows that housing prices in Beverly Hills are among the most expensive in Los Angeles.

2. Hollywood: $965,000

Hollywood is one of the most iconic places in Los Angeles and it is easy to understand why. With its vibrant film industry and stunning natural beauty, it is a popular destination for both tourists and prospective homeowners. As of December 2021, the median listing home price for Hollywood is $965.7K, which is an increase of 12.3% from the previous year. The median price per square foot is $1.1K, and there are 204 homes for sale and 205 listings for rent. Prices in Hollywood are significantly higher than the overall median listing home price in Los Angeles County, which is $912.1K, though they remain below the median listing price of Beverly Hills at $3.2M.

3. Los Angeles: $850,000

The typical house prices in Los Angeles vary greatly depending on the neighborhood. In Q3 of 2021, the median home sale price in Los Angeles was $950K with a year-over-year change of 4%. Additionally, the median price per square foot was $641 with a year-over-year change of 5%. The median sale price in Los Angeles County was $820K with a year-over-year change of 3%. In December 2022, the median listing home price in Los Angeles was $999K, trending up 6.3% year-over-year. The median listing home price per square foot was $644. The median home sold price was $905K. As of October 2021, the median sale price in Los Angeles had risen to $909,000. In the most expensive neighborhood of Bel Air, the median listing home price is $5.2M, while the most affordable neighborhood of Downtown Los Angeles has a median listing home price of $658K.

4. West Hollywood: $850,000

The typical house prices in West Hollywood, Los Angeles vary depending on the neighborhood. As of December 2021, the median listing home price in West Hollywood is $965.7K and is projected to increase to $1.0M by December 2022 (a 12.3% increase). Inglewood has a median listing home price of $663.5K, which is expected to increase to $720.8K by 2022 (an 8.6% increase). Los Angeles has a median listing home price of $912.1K, which is projected to increase to $989K by 2022 (an 8.4% increase). Lastly, Culver City has a median listing home price of $1.0M, which is expected to remain the same through 2022 (a 1.8% increase). Overall, house prices in Los Angeles are increasing, although the rate of increase varies depending on the neighborhood.

5. Venice Beach: $2.3 million

The typical house prices in Venice Beach, Los Angeles vary depending on the neighborhood. The median sale price of the area is $2.3M, with the median ZHVI (Zillow Home Value Index) of $1.2K per square foot. The average house stays on the market for 66 days and lists around its actual price. Compared to last year, the current home prices in Venice Beach are up 1.6%.

The most expensive areas in the area are Beverly Crest and Trousdale Estates, with median ZHVI of $3.2M and $10.5M respectively. Other affluent neighborhoods in the area include Beverly Hills Gateway ($11.9M) and The Flats ($9.9M). On the other hand, more affordable neighborhoods in Venice Beach include Beverly Glen ($1.7M) and Norma Triangle ($1.6M).

6. Santa Monica: $1.5 million

The typical house prices in Santa Monica, Los Angeles are quite high. According to the data supplied above, the median sale price in Santa Monica is $1,537,000, which is the ninth highest of the fifty cities listed. This places it ahead of cities such as Arcadia ($1,450,000) and El Segundo ($1,410,000). Santa Monica is a desirable area to live due to its proximity to the beach and its abundance of amenities. In addition to its high median sale price, Santa Monica also has a higher than average median listing price per square foot of $1,117 compared to the Los Angeles Metro Area median of $862. This shows that Santa Monica is a highly sought-after area with high demand and high prices.

7. Brentwood: $2.5 million

Brentwood is one of the most affluent and highly desirable neighborhoods in Los Angeles. The median listing home price in Brentwood is currently $2.5M, with a listing price per square foot of $927. There are currently 116 homes for sale, and 160 homes for rent in Brentwood. The typical house prices in Brentwood depend on the size and features of the property, but generally range from $2.5M – $4M.

8. Downtown Los Angeles: $600,000

Downtown Los Angeles is considered the most affordable neighborhood in LA, with a median listing home price of $658K. Home values have been on the rise compared to last year, but this area is still not considered very competitive in terms of market prices. The average listing price for Downtown LA is around $1.1M, and houses typically sell for roughly 2% below list price and stay on the market for an average of 59 days. Additionally, the median price per square foot is $644. As of October 2021, the median sale price in Los Angeles had risen to $909,000, up 4% year over year.

9. Pacific Palisades: $2.3 million

The typical house prices in Pacific Palisades, Los Angeles, are quite high due to its prime location and desirable residential area. According to the LA Times, the median sale price in Malibu, the most expensive city in the county, is $4,000,000 and the median sale price in Beverly Hills is $3,312,500. Pacific Palisades ranks fourth with a median sale price of $2,380,000, below the median sale price of Manhattan Beach and Palos Verdes Estates. Recent listings in the area include a five-bedroom, two-and-a-half-bath, 1,800-square-foot house with new appliances throughout listed at $825,000, a five-bedroom, six-bath contemporary with views from downtown to the Pacific listed at $2,795,000, and a four-bedroom, five-bath mid-century modern with an eat-in chef’s kitchen and infinity pool listed at $6,799,000.

10. Thousand Oaks: $950,000

The median listing home price in Thousand Oaks, California is $950,715, with a 1-year value change of +2%. Listing prices per square foot range from $441 to $1,200. There are currently 74 homes for sale and 38 homes for rent.

Housing trends forecast for Los Angeles

What are the housing trends forecast for Los Angeles? Trend analysis reveals that the Los Angeles real estate market is in line with national trends, primarily due to indicators created in the wake of COVID-19. The forecast suggests that home values will increase at a slower pace than last year, interest rates will rise, rental costs will increase, investing indicators will favor landlords, and there will be a negative net migration. These trends present a number of opportunities for real estate investors looking to get into the Los Angeles market. Those who get in now may be happy they did!

FAQ

What are the current housing trends in Los Angeles, CA?

The current housing trends in Los Angeles, CA are largely the result of the COVID-19 pandemic. According to data from the Mortgage Bankers Association (MBA), the median price of existing homes is in line with national trends. In April 2020, single-family homes saw the biggest percentage gains of the year, increasing by 4.9% in Los Angeles County, 3.7% in Orange County, and 5% in the Inland Empire.

Neighborhoodscout.com indicates that one and two-bedroom large apartment complexes are the most common housing units in Los Angeles. Other types of housing include single-family detached homes, duplexes, rowhouses, and homes converted to apartments.

The real estate market in Los Angeles has been hot for years and 2018 saw record-high home prices. According to the S&P CoreLogic Case-Shiller index, the year-over-year price increase peaked at 8.2% in April 2018 and has since declined. In October 2018, the year-over-year price increase was 5.5%, and by January 2020, median home prices in Los Angeles County were at $579,500, a 2.6% increase over the previous year.

The 2020 pandemic has led to an increase in median home prices due to a decrease in the amount of money homebuyers can borrow in the midst of rising interest rates. The National Association of Home Builders and Wells Fargo Housing Opportunity Index have declared Los Angeles as the least affordable housing market in the country, with only 11.3% of homes sold during the fourth quarter of 2019 being affordable to families earning the area’s median income of $73,100. Additionally, rental prices have decreased due to the pandemic.

What is the median rent in Los Angeles, CA?

The median rent in Los Angeles, CA is $2,444 as of November 20, 2022, according to RENTCafé. This is an 11% increase compared to the previous year. According to the Zumper Los Angeles Metro Area Report, the California one bedroom median rent was $2,076 last month, while Santa Monica was the most expensive city with one-bedrooms priced at $3,070 and Twentynine Palms was the most affordable city with one bedrooms priced at $1,000.

What is the forecast for the Los Angeles, CA housing market?

The Los Angeles, CA housing market forecast for 2022 is that the median home value will increase at a slower pace than it did in 2020 and 2021. The median home value is expected to increase somewhere in the neighborhood of 8-13%, lower than the 15.9% increase we saw in 2020. Additionally, the Mortgage Bankers Association (MBA) predicts that interest rates on 30-year fixed-rate mortgages will increase more than they did in 2020, but it is unclear what the exact increase will be. Furthermore, rental rates are expected to also increase in the double digits due to a lack of listings, as more people are expected to rent rather than buy. Finally, the population of Los Angeles is expected to continue to decline, as more people seek out more affordable alternatives due to the increasing home prices.

Are there any rental price changes due to the pandemic?

The pandemic has had a dramatic impact on the rental market in California. Apartment rent prices in the Bay Area have gone down significantly as vacancy rates have increased. On the other hand, other housing markets in the state such as single-family homes have seen an increase in demand and prices.

This is highlighted in CAR’s forecast report which shows that condo prices have dropped steeply in areas such as NAPA (-31.9%), SF Bay Area (-3.4%), Santa Barbara (-22%), Fresno (-17%), and San Mateo (-7.9%). However, prices have risen in regions such as Monterey (+16.9%), Solano (+21.7%), and San Bernardino (+14.5%).

It is clear that the pandemic has had a big impact on the California rental market, with some areas seeing an increase in prices while others have seen a decrease. It is important to note, however, that the overall trend of rent prices going down due to the pandemic is likely to continue as stimulus money arrives and the recovery begins.

What neighborhoods in Los Angeles, CA are best for rental properties?

The Los Angeles real estate market is an attractive option for investors looking to grow their rental property portfolios. The city’s strong job market, favorable price-to-rent ratios, and growing demand make it a great option for rental investments. The best neighborhoods for rental properties in Los Angeles, CA are Wilmington, Boyle Heights, Canoga Park, Northridge and Winnetka. These neighborhoods demonstrate a propensity towards higher returns for landlords and have a unique combination of appealing factors. Additionally, single-family homes often do not fall under rent control ordinances, which can be beneficial for landlords.

Hollywood Hills West, Brentwood, and Westwood are among the most popular neighborhoods in or around Los Angeles. These areas come with higher prices for both buying and renting, but can also offer higher returns. Additionally, the growth of renting among middle and upper classes is driving demand for the luxury Los Angeles real estate market. Finally, the presence of military bases in the area is adding to the overall rental population in the city.

How has the Los Angeles, CA housing market been affected by the recession?

The Los Angeles, CA housing market has been greatly affected by the recession due to factors such as high unemployment, lack of available inventory, and high prices. Unemployment spiked in the area during the recession, making people less inclined to spend money on a home. As a result, the temporary housing market shutdown became more pronounced. To add to the problem, inventory was lacking, creating a lot of competition. Ultimately, this competition drove prices up and made them too high for many potential buyers. This has led to an exodus of buyers and sellers leaving the area due to the inability to keep up with the market prices. To make matters worse, the Fed’s interest rate policy has created an environment that is too attractive for people to not consider, leading to further competition and higher prices.

What is the price appreciation rate for Los Angeles, CA homes?

The price appreciation rate for Los Angeles, CA homes is currently at 4.6% according to Zillow’s Home Value Index, with home values in Los Angeles County standing at $846,652. Additionally, data from NeighborhoodScout.com shows that in the past ten years, Los Angeles homes have appreciated 146.06%, which equates to an annual real estate appreciation rate of 9.42%. Furthermore, in the latest twelve months tracked, Los Angeles’ property appreciation rate has been around 14.34%, with a rate of 3.63% in the last quarter.

What are the real estate listings like in Los Angeles, CA?

The real estate listings in Los Angeles, CA are highly varied. The median listing price for a home in the area is around $941,000, though this has gone down 5.9% in the past year. Additionally, the number of new listings has dropped by 22.4% from last year and active listings have decreased 39.3%.

In December 2022, the median list price for homes was $989,043, with the average listing age being 40 days. Prices for 1 bedroom properties increased by 4.1%, prices of 2 bedroom properties increased by 7.5%, prices of 3 bedroom properties increased by 6.8%, prices of 4 bedroom properties increased by 10.1%, and prices of 5 bedroom properties increased by 3.8%. In the same time period, 1 bedroom properties decreased by 5.9%, 2 bedroom properties decreased by 10.7%, 3 bedroom properties decreased by 11%, 4 bedroom properties decreased by 10.1%, and 5 bedroom properties decreased by 0.3%.

The Los Angeles area offers a great opportunity for real estate investors, as distressed sellers exist in the market and there is a wide selection of properties. For those looking for deals, neighborhoods such as Vermont Vista, Hyde Park, Wilmington, and Cypress Park all have asking prices below the Los Angeles median price. Additionally, foreclosures are an option for buying homes at a bargain price.

Are there any rent control ordinances in Los Angeles, CA?

Yes, rent control applies to Los Angeles rental properties if they are multi-family units. Single-family detached homes rarely fall under rent control ordinances. The only exception is when two or more dwelling units are located on the same lot; then rent control rules are likely to apply. California has also passed a statewide rent control law which applies to all multi-family rental units built more than 15 years ago. On top of that, local ordinances may provide even stricter rent control rules. Therefore, it is important to be aware of the rent control regulations in Los Angeles before investing in rental property in the area.

What are the borrowing costs like in Los Angeles, CA?

When it comes to borrowing costs in Los Angeles, CA, it is important to compare the rates. Generally speaking, mortgage rates tend to be lower than other borrowing options, such as credit cards or personal loans. According to the latest data, the current average rate for a 30-year fixed-rate mortgage is 3.41%, while the average rate for a 15-year fixed-rate mortgage is 2.80%. However, the interest rate can vary depending on the type of loan, the down payment, and the credit score of the borrower.

Meanwhile, the average credit card interest rate is currently at 16.35%. On the other hand, personal loan rates are usually around 8.3% – 10.5%. The exact rate you get depends on many factors, such as the lender, your credit history, and the loan amount.

Overall, if you are looking to borrow money in Los Angeles, CA, you will likely be able to get lower interest rates if you opt for a mortgage instead of a personal loan or a credit card.