LA condo sales sluggish, as real estate market softens

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LA condo sales sluggish, as real estate market softens

Los Angeles’s real estate market continues to cool after years of accelerating prices, and a new figures from the California Association of Realtors show that effect has extended to condo sales as well as single-family homes.

The total number of condos and townhomes sold in December across all of Los Angeles County dropped 24 percent since last year. In that time, sales prices grew—but not by much. The median sale price of $430,000 rose just under 2 percent, according to data released by the association.

When accounting for the size of the unit, the difference was even smaller. On a per-square-foot basis, condo prices went up just 1.7 percent.

Generally among the most affordable properties on the market, condos and townhomes appeal to budget-conscious or solo shoppers and in California are disproportionately popular with millennials and senior buyers, according to a recent report from CAR.

The median sale price of single-family homes was $588,140 in December, up 1.8 percent since a year earlier.

Buyers with tighter budgets are more likely to feel the strain of rising interest rates, which have driven up monthly mortgage payments considerably over the last year.

As Zillow economist Aaron Terrazas told Curbed earlier this month, affordability concerns and a decline in millennial buyers is one reason that LA’s real estate market has softened since late summer.

Sale numbers from the California Association of Realtors also show that sellers may need a little more patience when listing condos and townhomes today than a year ago. In December, the average condo spent a full 10 days longer on the market than those sold 12 months earlier.

Many of those units also sold at a discount. The median sale price last month was 1.6 percent below the list price; in December 2017, a typical unit sold for exactly the price at which it was listed.

The association exclusively gathers data on sales of existing properties, meaning those that are newly built are excluded from sale data. A separate report from Loftway also excludes brand new units, but shows that condos in recently built Downtown LA complexes like Metropolis and Ten50 Grand command far higher prices than those in older developments.

Condos in Metropolis, for instance, sold for more than $1,100 per square foot in 2018. That’s almost twice the Downtown average and roughly three times the price of a typical existing condo in Los Angeles County (based on the California Association of Realtors data).

Sellers did have to wait a bit longer to find a buyer for Metropolis units. Condos in the megaproject sat on the market for 33 days, nearly a week longer than the 27-day countywide average.

 

Click here for the original story on Curbed LA.