Standing at the grocery store checkout on a busy afternoon, the lines can stretch on for what seems like forever. Upon looking around, there are inevitably several registers that are not open, despite the throngs of shoppers waiting for someone to ring them up. After waiting for several minutes, not one, but three registers open up, and all lanes are open. “Next in line,” the new cashiers announce. Suddenly, the lines move rapidly, and everyone is able to check out so that they can get home and put away their groceries.
Home buyers have been stuck in long checkout lines with a limited inventory that dates back to the start of 2020. Open houses have been crowded. Multiple offers were the norm. Throngs of buyers toured homes, wrote offers, and hoped that someday they too would be able to secure a home. Suddenly, with the highest June supply since 2019, buyers have a lot more choices, and negotiations are lining up in their favor. Buyers are finally able to “check out” and secure a place to call home.
The evolution of the buyer’s market was extremely slow, taking years to develop. It began in 2022, when rates surged higher, rising from 3.25% in January to 7.37% in October. To counter the low demand, the active inventory remained chronically low as very few homeowners participated in the housing market. Homeowners chose to “hunker down” in their homes, unwilling to move due to their underlying, locked-in, low fixed-rate mortgage. As of the start of 2025, 80% of Californians with a mortgage enjoy a fixed rate at or below 5%. In 2023, 33% fewer homes were placed on the market in Los Angeles County compared to the 3-year pre-pandemic average (2017-2019), or over 30,000 missing FOR SALE signs. However, in 2024, with more homeowners participating, the number of missing signs dropped to 22%, or 20,400 fewer sellers. In 2025, it is only off by 12% through May. That’s an additional 5,507 sellers compared to last year, and 10,167 more than in 2023. In matching nearly identical demand compared to 2023 and 2024, the additional sellers have accumulated, and the inventory has grown substantially. With rising inventory and muted demand, the Expected Market Time (the number of days it takes to sell all Los Angeles County listings at the current buying pace), the actual speed of the market, has grown to 116 days, its highest June level since tracking began in 2012.
The active inventory currently stands at 14,882 homes, which is 41% higher than last year’s 10,547 homes and 98% higher than 2023’s 7,514 homes. Demand (a snapshot of the number of new pending sales over the prior month) is currently at 3,850 pending sales, 82 less than last year’s 3,932 reading, and 17 more than in 2023. Today’s 116-day Expected Market Time is 36 additional days compared to last year’s 80 days, and more nearly double 2023’s 59 days.
It is today’s longer market time that is tipping the Los Angeles County housing market in the buyer’s favor. There are a lot more sellers competing against each other. A revealing 34% of the active inventory has reduced the asking price at least once. Through May, 11,424 unsuccessful sellers have pulled their homes off the market, up 87% compared to last year. Sellers are more willing to negotiate today than they have been for years.
ATTENTION BUYERS: Do not wait for prices to plunge before purchasing. Home values are up 1.0% year-over-year in May in Los Angeles County, according to Zillow’s Home Value Index, yet they are down 0.6% month over month. It will continue to slowly decline through the end of the year as long as mortgage rates remain close to 7%. Home values will not plunge. There are very few sellers desperate to sell their homes. The housing stock, comprising all homeowners, is the strongest it has ever been. Ever since the Great Recession, buyers have been purchasing homes with strict qualifications, strong credit, great jobs, and low fixed payments. There is record tappable equity (the amount of equity a homeowner can use for a loan while still retaining at least 20% equity), record equity-rich (50% or more equity), and a record number of homeowners who own their homes free and clear. Due to the homeowner's strength, sellers will be unwilling to give up much equity. To achieve success, some sellers will be willing to take just a little bit less than the last successful seller; thus, home values will slowly drift down.
ATTENTION SELLERS: Accurate pricing is the most crucial step to achieving success in today’s highly competitive market. Methodically arrive at a home’s Fair Market Value by carefully scrutinizing the most recent pending and closed sales. Overpriced homes do not sell. Instead, it wastes valuable market time. The market is only slowing from week to week. Housing will be slower when a home’s price is adjusted down the road, and any price improvement does not receive the same fanfare as when it was initially listed for sale.
After many years lining up in favor of sellers, the Los Angeles County housing market is finally a buyer’s market.
