A report from Trulia shows homes being listed with the highest number of price reductions since 2011. The Los Angeles market is seeing 12.1% increase in price reductions year over year in the month of August. Price reductions are a key indicator that the market is shifting.
We have been in a seller friendly market for over eight years. Housing affordability in Los Angeles is at a 10 year low and combined with rising interest rates (mortgage rates up over 20% over the past year), the market is shifting. Though still low from a historical perspective, housing inventory is increasing and providing buyers more options and less of a frenzied atmosphere to purchase a house.
Keep in mind two very important factors- 1- Entry level price points in each micro market are still in the seller’s favor, especially when the price point is between $900K-$1.3M. 2- In the long run (10+ years), Westside/South Bay real estate has proven to be an “A” level investment and still relatively cheap compared to other large international cities.
Here is a link to a recent LA Times article: Is winter coming for Southern California’s housing market?