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2021 Year In Review and What To Expect In 2022

 

Los Angeles Market Continues To Grow Into The New Year

We are truly grateful to our clients, friends and family for their support and belief in us, as 2021 was our best year ever.  In 2021, we executed 83 total transactions, generating a total sales volume of over 89 million with an average list price to sale price ratio of 106.27%. Our production increased by about 25% over 2020.  As we look towards 2022 we are excited to bring some gorgeous, unique properties to market and to continue to serve our clients and our community with the utmost integrity and care.  Developing meaningful relationships with our clients is really what makes it so rewarding and meaningful for us.

Let’s take a look at what’s shaping the 2022 L.A. real estate market

#1 Low-and-Slow Mortgage Rates

Along with the rest of the nation, COVID-19 hit Los Angeles County hard, bringing this California housing market sector to a stop under shelter-in-place orders. But the pause button was released fairly quickly and low-interest rates meant to encourage ongoing activity had the L.A. real estate market surging throughout 2021. Interest rates are expected to increase as we move into 2022. However, even with a moderate increase, rates will still be at historically low rates, which means next year will continue to be an attractive time to finance a house purchase.

#2 A Housing Inventory Crunch

Inventory is limited and will probably remain so, and that in turn will continue to drive home prices upwards.  Bidding wars are probably here to stay for the foreseeable future, but they may not be quite as fierce as the market stabilizes and rates creep up.  As far as real estate trends in Los Angeles go, limited supply is a critical influence on pricing.

#3 Steady Price Growth

Over the next year, experts predict an increase in Los Angeles market value of up to 8.3% in response to continuing supply and demand constraints.  While new buyers should continue to enter the market, higher interest rates and a less frenzied buying environment might slow down bidding wars.  While it’s still a time of growth, it should be a steadier climb rather than a sharp jump like we’ve seen since early 2020.

#4 Expanding Home Space

What will buyers be looking for? They may favor larger homes over one bedroom apartments and condos. You couldn’t blink in 2020 without coming across content about how to survive and thrive in your home. With outside socializing and events canceled, people jumped into cooking at home, gardening, interior decorating, and other home-based hobbies. They needed more space to grow, to move, and to find quiet time away from family members. The demand for homes that can stand up to 24/7 work and home life continues to be a strong trend.

#5 A Rising Rental Market

Like many counties with a population over 1 million, Los Angeles is currently more affordable for renters than buyers. This is great news for potential investors—and for homeowners looking to cash in on their investments. Analysts don’t anticipate a downturn to growth in property value over time, situating L.A. as a continuing opportunity for property investors in general.

#6 Rising Prices in the Suburbs

As more workers dial in from home, businesses are shifting to accommodate distance teams that both free up real estate investment and multiply their new hire candidates. Without a daily need to commute, workers can explore houses further away from expensive and crowded city centers.  And while Los Angeles is already a sprawling metropolis, the trend towards working remotely has led to higher real estate prices in the surrounding areas.

Our Conclusion

Whether you’re looking to sell or purchase, knowing what’s going on both nationally and locally with real estate trends can help you make the best decision.  Certainty is elusive these days, and that’s where our knowledge and experience comes into play. Please feel free to reach out to us if you are facing a decision about where to live or how to invest.  We are here to offer support and guidance without pressure.  Our goal is always to help guide you to the best outcome, whatever that means for you.

Wishing everyone a fantastic start to the new year!

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Presented by Lorin Ruttenberg and Erica Lockhart of Ahead of the Curve Homes.

Los Angeles 2022 Forecast 

Read more of our blogs here.

Erica Lockhart – DRE 01763313
Lorin Ruttenberg – DRE 01309588
Compass is a licensed real estate broker licensed by the state of California and abides by equal housing opportunity laws. All material presented herein is intended for informational purposes only. Information is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to accuracy of any description. All measurements and square footages are approximate. This is not intended to solicit property already listed. Nothing herein shall be construed as legal, accounting or other professional advice outside the realm of real estate brokerage.