The following represents the Los Angeles housing market trend for single-family homes over the last 13 months.
Overall the figures show the market turning around as follows:
The median price has decreased by 12% from $608,000 in ’08 to $533,000 in ’09.
The number of homes sold in Los Angeles has increased 12%, from 356 to 410.
The number of properties on the market has decreased by 42%, from 4,500 to 2,632. This is good news as the prices should start to rise due to the shortage of inventory.
The average days on the market has decreased by 2% from 79 to 77. This shows a balanced market. Anything under 30 days is fast and over 90 days is a slow market.
Other statistics show:
The number of new properties coming on the market each month has decreased by 33% from 825 to 551. Also an indication that prices could start to rise due to the inventory shortage.
Supply and Demand per month shows a significant downward trend in inventory, 42%, from 4,500 to 2,632 and a 15% upward trend in demand, from 356 to 410 in terms of homes sold.
Months supply of inventory is a great indicator that the market is slowly turning around. The time it takes to sell the existing inventory shows whether this is a Buyer’s Market, a Sellers’ Market or a Balanced Market. Anything at or below 3 months is a Seller’s Market since there is little inventory and prices get bid up due to competition. At or above 6 months is a Buyer’s Market due to the choice of homes, and therefore prices drop. Anything in between is a Balanced Market. The formula for Months Supply is the number of properties on the market at the end of each month divided by the number that had accepted offers that month.
The Months supply of inventory has decreased 66%, from 3,721 to 1,757. Another sign that the market is turning around.