Market Recovery To Be Put Off Until Favorable Forces Align
The recent history of the L.A. County residential real estate market is a series of recoveries followed by stalls and retreats for various reasons. The long, slow home sales recovery after the 2008 crash was driven mostly by investors purchasing properties for rental. Even though the county recovered economically, buyer-occupants had to deal with rising interest rates and were wary of fully committing to the market
Now, with the coming of the pandemic, interest rates are at the lowest levels ever. Still, buyer-occupants are unwilling to commit in light of the job losses from the pandemic, which many see as probably worsening over the coming months until year’s end. This could mean a basically stagnant market with a true recovery delayed until 2022-2023.
None of this means that there are not “pockets” of really booming sub-markets” here and there. The vacation home market, for instance, is booming in our nearby mountain communities. That is also, however, driven by investors and “preppers” who want investments and “refuge” properties away from the heavily populated areas.
This article by the editorial staff of “First Tuesday Journal” is an incredible, in depth look at the forces driving the current Buyer-occupant market in L.A. County right now. There is a ton of information here, and i hope you find this all as interesting and informative as I do.
“The homeowner turnover rate will rise once home prices and interest rates align to produce desirable homebuying conditions. This is not expected before 2022-2023, when the additional and necessary factor of greatly increased residential construction will be experienced and a recovery from the 2020 recession will begin.
“This upturn will be fueled by a Great Convergence of first-time homebuyers (members of Generation Y forming households), retiring Boomers buying replacement homes and increased inventory generated primarily by construction starts, but short sales and REO resales will be in the mix. Domestic and international emigrants will play a significant role in the county’s periphery housing — the suburbs.”
L.A. County Residential Real Estate Market – Don’t Look For The Recovery Just Yet
With all of the factors accounted for, the recovery from the 2020 recession won’t happen in the buyer-occupant market in L.A. County until 2022-2023. Even with some sectors of the housing market… even in single family residences… being driven by investors and “specialty” buyers (like “preppers“), the true recovery won’t gain a good foothold until the pandemic is a thing of the past, Gen Y homebuyers are confident enough to “take the plunge”, and baby boomers downsize comfortably. All that will not come together for a while yet.
L.A. County Residential Real Estate