Commuters know precisely how long it takes to get to work. They wake up at the same time. They get ready, eat breakfast, and jump in their cars in a timely, habitual rhythm. That is, until the day when their commute is disrupted by bumper-to-bumper traffic due to a brand new construction project with signs exclaiming that it will not be complete for a little over a year. It now takes much longer to arrive at work, so everyone has to recalibrate the commute and prepare by adjusting their morning routine to accommodate the extra time in the car.
The Los Angeles County housing market is experiencing more traffic, with extra FOR SALE signs and only slightly better buyer demand. The result is a much slower market that nobody had been anticipating. Housing is much different than the hot markets from 2020 through 2024. It takes longer to sell. Sellers need to recalibrate their expectations and spend more time preparing their homes for sale and methodically and carefully arrive at their asking price, the Fair Market Value of their home.
This is the third year where demand (a snapshot of the number of new pending sales over the prior month) has been stuck at very low levels, the lowest since tracking began in 2012. These low-demand readings are a direct result of unaffordability. When mortgage rates increased from 3.25% in January 2022 to over 7% in October, just nine months later, demand collapsed. The payment, principal and interest, on a $1 million home with 20% down grew from $3,481 per month at 3.25% to $5,322 at 7%, an increase of $1,841 monthly or over $22,000 annually. The current demand is at 3,616 pending sales, 5% higher than last year and 3% weaker than in 2023. Yet, it is 29% less than the 3-year average before the pandemic (2017 to 2019) of 5,116 pending sales.
The active listing inventory is a different story altogether. Before this year, the inventory was stuck at chronically low, anemic levels from 2021 through 2024. That began to change last spring as more homeowners opted to sell than in 2023. Since demand was at similar levels in 2024 compared to 2023, the extra sellers accumulated on the market, and homes started taking longer to sell. Many homeowners were “hunkering down” in their homes, unwilling to move due to their underlying, locked-in, low fixed-rate mortgage. In 2023, there were only 9,208 new sellers in January and February, down 35% compared to the 3-year pre-pandemic average of 14,139. In 2024, there were 10,784, down 24%. In 2025, there were 13,170 new FOR SALE signs, down 7%. Yet, there are 2,386 additional signs compared to last year and 3,962 more than in 2023. These extra sellers have accumulated over time. Today, the active listing inventory stands at 11,126 homes, up 45% compared to last year. It is the highest level for this time of year since 2019, when there were 12,675 homes on the market.
The market is substantially slower in matching the higher inventory with anemic, low demand. The Expected Market Time (the number of days it takes to sell all Los Angeles County listings at the current buying pace) is 92 days, its highest level at this time of year since tracking began in 2012. Last year, it was 67 days, 25 days faster than today. In 2023, it was 58 days, also significantly quicker. Today’s housing market is far from instant.
The current trend is for the active listing inventory to continue to grow. It will grow at an even faster velocity during the Spring Market. As spring progresses, the number of homes coming on the market will outpace demand, and the Expected Market Time will rise. The only caveat is if rates continue to fall. Mortgage rates were stuck above 7% from mid-December through mid-February. Yet, with economic growth slowing, according to Mortgage News Daily, rates have dropped to 6.74% to start March, their lowest level since the start of December. If they fall further with duration, demand levels could rise. As a result, the Expected Market Time would not climb at a slower pace.
Nonetheless, today’s housing market is much slower than many have become accustomed to. Los Angeles County housing is far from instant. A traffic jam is forming with a much higher active listing inventory and more sellers coming on the market each month. It is a sound strategy to expect even more brake lights ahead.
