Sitting On the Market
A surprising 60% of the active inventory has been on the market for at least a month.
For anyone going fishing for the first time, especially kids, there is a great deal of enthusiasm and wild expectations of reeling in a bucket full of fish. Upon arriving at the fishing hole and baiting the hook, it is time to fish. The line is cast out into the open water with a cheerful eagerness. The bobber floats in the water and only moves with the water current and does not bob, revealing that there is no fish on the line. The excitement drifts away as 20, 40, and 60 minutes pass, but still no fish. It seems as though time stops.
Sometimes, the fishing is excellent, and the bucket is filled with fish. There are other days when, after fishing for hours, only one is reeled onto the dock. And there are days when nothing is caught, not even a nibble, after trying every type of bait. A large part of fishing is seeing what others successfully use for bait and packing plenty of patience.
Many of today’s sellers are like first-time anglers. They come on the market with great enthusiasm and high expectations of multiple offers within the first week. They have heard about how great the fishing has been in the past. In March of this year, housing was sizzling hot, and most sellers were selling their homes at their list price and often fetched even more. Yet, upon hammering in the FOR-SALE sign and opening their doors to buyer showings, the days turn into weeks, and, frequently, the weeks turn into months. The housing market has evolved. The hot Seller’s Market has transitioned to a more Balanced Market where price is the number one driver to secure a successful outcome.
An unbelievable 60% of all homes on the active listing inventory have been exposed to the market for at least 30 days. Over a third, 37%, of the inventory, has been on the market for over two months and is still waiting for the right buyer to bring in an acceptable offer to purchase. That is a long time to sit and wait. Keeping a home in showing condition for more than two months is a lot of work and can be stressful. Of course, everyone expects sellers in the luxury ranges to play the waiting game; however, many sellers in the most affordable ranges are sitting on the market and waiting for a buyer to bring a workable offer. Below $1 million, a surprising 54% have been waiting for at least 30 days. For homes below $750,000, 32% have been sitting on the market for at least 60 days. From $750,000 to $1 million, 30% have been waiting for two months or more.
It is a similar story for homes priced between $1 million to $1.5 million, with 54% to 56% exposed to the market for at least a month and 30% to 32% that have been waiting for two months. For properties priced above $1.5 million, the share of sellers who have been waiting at least a month to find success grows from 63% to 78%. Between 36% to 59% have been on the market for 60 days or longer.
It is taking longer to sell in Los Angeles County than in early spring and last year. The Expected Market Time (the number of days it takes to sell all Los Angeles County listings at the current buying pace) is 88 days today. At the end of March, it was 60 days, the hottest reading in 2024, and a much faster pace. That is a substantial, noticeable difference in the marketplace. Last year, at this time, it was 68 days, also faster than today.
Why has the Los Angeles County housing market downshifted so much since early spring? Demand (recent pending sales activity) is actually up slightly year over year. In fact, today’s demand is currently 10% higher than last year. The big change has been that more homes are coming on the market than last year. While still muted compared to pre-pandemic years, 25% fewer homes have been placed on the market through July compared to the 3-year average before COVID (2017 to 2019), there have been 18% additional homes this year compared to 2023, an extra 6,710 FOR-SALE signs. Those extra signs have accumulated, and the active inventory has grown from 7,748 in March to 11,495 today, up 48% or 3,747 homes. Last year, there were 3,423 fewer signs in mid-August, 30% less.
The housing market is drastically different than earlier this year and last year. Sellers must take their time and carefully arrive at the asking price, meticulously considering a home’s condition, location, upgrades, and amenities. Many sellers simply cannot get out of their own way and are unwilling to listen to real estate experts and correctly price their homes according to the Fair Market Value. They are still waiting with no offers.
