When it comes to the Los Angeles housing market, the numbers speak volumes.
As we navigate the contours of 2023, the Los Angeles housing market continues to dominate conversations, not just among locals but also among potential buyers, sellers and investors nationwide. Recent data shows a complex narrative: a market that is both competitive and costly, while simultaneously in a state of flux.
While the towering home prices persist in their upward trajectory, a marked reduction in the volume of homes actually changing hands year-over-year offers a nuanced and intriguing subplot.
Climbing the million-dollar ladder
As of July 2023, the median sale price for a home in LA sits at an astonishing $1 million. This represents a 4.3% elevation since the previous year.
To place this figure in a broader frame, the median sale price in Los Angeles is a whopping 132% higher than the national average. But it’s not just the overall home prices that have climbed; even the cost per square inch is inflating. The median price per square foot has ascended to $627, a 2.0% increase from last year.
Market dynamics
In the Los Angeles housing market, homes don’t linger. The average home is sold after a mere 37 days on the market, a slight but meaningful increase from 35 days in the prior year. This suggests that while the market remains fiercely competitive, it is not a feeding frenzy. On average, homes in Los Angeles receive three offers.
However, adding a layer of complexity, the number of homes sold in July 2023 reached only 1,477, plummeting 18.8% from the same period last year. These numbers indicate a fascinating conundrum: Although the demand is astronomical, supply is staggering behind, making it predominantly a sellers’ market — but with intriguing twists.
How competitive is the Los Angeles housing market?
Measuring competition in any market is complex, but when it comes to the Los Angeles housing market, there are some quantifiable indicators. According to the Redfin Compete Score™, the market ranks as “somewhat competitive.” The average home here is sold for approximately 1% above the listing price.
Migration and relocation trends
The Los Angeles housing market isn’t solely affected by prices and competition; it’s also swayed by the tides of migration. Between June and August 2023, a considerable 81% of LA homebuyers expressed intentions to remain in the metropolitan area, affirming their loyalty to the City of Angels.
Conversely, 19% are looking to spread their wings and fly to other destinations, with Las Vegas, San Diego and Bakersfield topping the list. However, Los Angeles continues to exert its magnetic pull, drawing in new residents chiefly from San Francisco, followed by Chicago and New York.
LA’s housing market at a glance
The Los Angeles housing market of 2023 is an intricate choreography of rising prices, intense yet waning competition and fluctuating migration patterns. For prospective buyers, the city’s market poses challenges, but they are not insurmountable walls. Sellers, too, need to navigate carefully. The diminishing number of homes sold indicates a potential saturation point or perhaps signs of buyer fatigue.
For everyone involved — whether you’re an investor eyeing long-term gains, a first-time buyer looking to plant roots or a seller aiming to capitalize on high prices — knowledge is power. Staying abreast of the ongoing trends and dynamics in the Los Angeles housing market is not just advisable; it’s imperative. After all, in a market as multifaceted as this, understanding the lay of the land can make all the difference.
The Los Angeles rental market
While the focus has largely been on home buying and selling, the rental sector adds another complex layer to the Los Angeles housing market. As one of the most sought-after places to live in the country, it’s no surprise that Los Angeles’ rental rates are a significant talking point as well.
Average rent and annual changes
The average rent for a studio apartment in the City of Angels hovers at $2,421, marking a 3% increase from the prior year. One-bedroom apartments haven’t been left behind in this upward trajectory, clocking in an average rent of $2,905, which also reflects a 3% annual increment. Two-bedroom apartments, meanwhile, cost an average of $3,894, but have seen a more modest annual growth of 1%.
This data paints a picture of a rental market that, much like its home-owning counterpart, experiences its fair share of challenges and costs. Apartments in Los Angeles are not for those hunting for bargains, with the average rent ranging between $2,421 and $3,894.
Rent ranges
The Los Angeles rental market shows an overwhelming skew towards the higher-end. While 0% of apartments rent in the $501-$1,000 range, a staggering 80% of them command a rent north of $2,100. This underscores the upward pressure on the cost of living in Los Angeles and speaks volumes about the limited affordability.
Neighborhoods
When it comes to neighborhoods, Bel Air tops the list for studio apartments with an average rent of $3,695. On the other hand, areas like Beverly Grove and Westwood Village have seen decreases in average rent by 11% and 14% respectively. Silicon Beach, however, is bucking the trend with an 18% annual increase, echoing the tech boom that the area is experiencing.
For those looking for more budget-friendly options, South Park, South LA and Crenshaw offer average one-bedroom rents ranging from $1,650 to $1,900, compared to the Los Angeles average of $2,905 for a one-bedroom.
Comparing Los Angeles to nearby cities
In terms of rent, Los Angeles still commands a premium compared to other nearby cities. For instance, a studio apartment in Santa Monica averages $3,540 with a 6% annual increase, while the same in Long Beach costs $2,850 but has soared by 37% in the past year. Glendale stands at $2,755 for a studio, with an 8% rise.
Understanding the trends
The fluctuating rental rates over the past year indicate a market that’s anything but static. For instance, studio rents went from $2,302 in September 2022 to peak at $2,422 in July 2023 before slightly reducing. Similar patterns are observed for one-bedroom and two-bedroom apartments, showing the market’s elasticity and potential volatility.
The Los Angeles rental market at a glance
The rental landscape in Los Angeles is a vital part of the overall housing market, influencing and influenced by similar factors like location, demand and economic status. Whether you’re a potential tenant eyeing the city’s ritzy neighborhoods or someone seeking more affordable options, the Los Angeles rental market provides a plethora of choices — albeit at a generally high price point.
For individuals and families not yet ready to commit to homeownership, or those who prefer the flexibility that renting provides, understanding the dynamics of the rental market is as crucial as grasping the trends in home buying and selling.
When you’re ready to enter LA as a local, there will be an apartment waiting for you on Rent.
