Los Angeles Housing Market Update for Spring 2022

Spring, summer, winter or fall? Which season sees the most homes go into escrow?! Today I’m sharing insight into the real estate inventory cycle. 

Most people think summer is the hottest season for temps and sales but Spring time is when the housing market really hits its peak. Why is that? Because, most families actually prefer to move when the kids are out of school or about to be out of school. To accomplish their goals, they have to place their home on the market in the spring to move during May-July.

Every seller wants to close sell their home as quickly as possible. It typically takes about 30-45 days to close escrow. An escrow is when the home inspection takes place, an appraiser comes out and appraises the property, home disclosures ar signed and a truck load of documents go back and forth for signatures, the loan is put together and finally, money exchanges hands. All of this occurs prior to closing when the buyer is finally able to move into the home. 

In Los Angeles, on average, more homes come on the market in May, the middle of spring than any other month of the year. The number of homeowners coming on the market is heightened from March through July. This enables families to move from May - August, prior to the kids going back to school. Real estate seasons tend to center around family life and making life more convenient for the whole family.

Reports on Housing shows this snapshot of demand of the prior 30-days of pending sales activity, gaining momentum during the winter months, continuing to rise and peak during the spring and downshifting slightly during the summer. In the fall, things tend to slow down as kids head back to school and then takes a dive in the winter when everyone is focused on holiday celebrations. This is the normal housing cycle which is unlikely to see much change in 2022.

Already, we can see demand ramping up. In the past 8 weeks demand is up 45% and in the last two weeks alone, it has risen by 3%. From here, we can only expect demand to rise until it peaks in April and May, before it starts to slowly slowly fall. 

Demand is pretty similar to the 3 year average prior to COVID (2017-2019), with only 5% fewer homes in escrow. It would be a lot higher but has been muted due to the combination of an extremely anemic inventory, at record low levels, and fewer homes entering the market. In fact, there have been about 13 % missing for sale signs during the first few months of 2022. 

So will the spring season be sprung with new inventory? The main issue this spring is that there will be a tremendous amount of buyers competing against each other to purchase available inventory. Each home that hits the market, is likely to see competition so the current trend of multiple offers, sellers calling the shots and increased sales prices is unlikely to change. That being said…historically, spring is when the market ramps up in Los Angeles so if you’ve been waiting to see more homes…now may be the time, but you’ll still need to move quickly and aggressively to come out on top and if you’re looking to sell…there’s truly no time like the present. 

If you have questions about this Spring market update, send me a message or comment below!