A new report from John Graff Real Estate finds the red hot sellers market in LA might be slowing down. Pending home sales in July were down a hefty 35 percent from the same month in 2015. Closed home sales were also down 9.3 percent—a pretty sluggish number for the summer month, when many expected home sales to pick up.
While sales were down, it was not a problem of supply; the number of homes on the market hasn’t changed much in the past year, but total housing supply has risen 55 percent during that time. Right now, LA has four-and-a-half months of supply, meaning that if homes continue to sell at current rates, it would take about that long to sell every home presently on the market.
Supply numbers below six months normally indicate a seller’s market, but in a city like LA, buyers will likely take what they can get. As recently as June, supply was below three months.
Has the slowing market affected the city’s insanely high home prices? Nope. They’ve actually gone up nearly six percent since last year, with average home prices in Los Angeles County sitting at a whistle-inducing $560,000. Still, with more homes struggling to sell, prices might be on their way down in the near future. Not to levels considered remotely affordable by most Americans, but maybe to a place where more than one-quarter of area residents can afford to buy.