Talk of a stagnant housing market is finally coming to a lull as nationwide home sales have finally picked up in May. According to a recent study by the National Association of REALTORS®, total existing home sales rose 4.9 percent to a seasonally adjusted annual rate of 4.89 million units. This is up from the 4.66 million units sold in April, but is still 5 percent May 2013’s yield of sold homes.
After quite the slow start to the home buying season, buyers are finally able to take advantage of the improving economy and conditions in housing inventory.
“Home buyers are benefiting from slower price growth due to the much-needed, rising inventory levels seen since the beginning of the year,” said NAR chief economist Lawrence Yun. “Moreover, sales were helped by the improving job market and the temporary but slight decline in mortgage rates.”
As a state, California has not fared quite as well as the nation in home sales. According to the California Association of REALTORS®, home sales throughout the state have eased slightly in May as its localized markets continue to deal with a shortage of homes for a hungry set of home buyers. Sales dipped by 0.6 percent in May from April and were down 9.5 percent from one year ago.
“Since last summer, the market has been transitioning to a slower pace of sales, somewhat higher inventory and less upward pressure on prices,” said CAR President Kevin Brown. “Generally speaking, buyers are feeling less urgency to buy as affordability has become more of an issue and lending standards continue to remain tight. However, a recent surge in mortgage applications, due partially to declining interest rates, may indicate that higher housing demand can be expected in the coming months.
Los Angeles Home Sales Increase
One bright spot that remains on the California housing market is Los Angeles. The L.A. metropolitan area was one of the few for the state that posted increases in both median sold prices of homes and home sales for the month of May.
The California Association of REALTORS® reports that the median sold price increased from $412,060 to $425,900 from April to May, an increase of 3.4 percent. Prices also reflected a year-over-year increase of 11.9 percent. At this time last year the median sold price of existing single-family home in the Los Angeles metropolitan area was $380,540.
The month of May also brought an increase in home sales in Los Angeles. The city saw a gain of 4.4 percent in sales, which is right on target with the national average. Low inventory still seems to have a stronghold on the market, as sales from last year are still down by 11.8 percent.
As home prices continue to temper, market watchers are hopeful that buyers will be able to take advantage of recent low mortgage rates and increasing affordability in order to get more active on the market.
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(all data current as of 10/22/2017)
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