LA-OC listing prices down 7% in a month. Inland Empire, off 1.2%
Will Southern California home values survive the novel coronavirus? We’ve seen this scenario before. A sudden shock to the economy. Jobs lost. Lenders in trouble. Yes, it’s early in the battle against the pandemic, so any economic guesswork probably requires a degree in epidemiology more so than a spreadsheet. But real estate history does have some lessons for anyone pondering what’s next for housing. Today’s economic turmoil may not be another Great Recession that savages local home prices. The virus era might more be like an early 1990s replay. That often-forgotten downturn had far less drama, but it left long-lingering headaches for real estate. Much like the late 1980s, real estate had been on a roll of late. The region’s housing market came into the virus era with prices surging. The six-county median sales prices for existing and new homes was $550,000 in March, up 6.8% in a year, tying December’s record high, according to DQ News. But March results were mostly deals in progress well before “stay-at-home” mandates throttled the region’s economy and dramatically slowed the home-selling business. And we know fewer transactions could create a drag on pricing. Early hints and concessions Some early reports on April activity suggest discounting may have begun already. Zillow looked at listing trends for existing homes and condos and found the median asking price in Los Angeles and Orange counties, as of April 19, was $856,575 — down 7% in a month. Yes, it’s up 7% in a year but this same metric was growing at an 18% annual pace as of mid-March. In the Inland Empire, the $419,966 median was off 1.2% in a month as the rate of annual increases fell to 2% from 3.7% in mid-March.
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