A Sluggish Market
With an Expected Market Time of 128 days for all of Los Angeles County, sellers need to pack their patience.
Anyone who has fished for years can attest that there are seasons
when the fishing is great and the bucket is filled with fish. Yet, there are
also seasons when nothing is biting, and very few fish, if any, are reeled in
and thrown in the bucket. Second-guessing the strategy is a big part of
fishing. Is there a better bait? Maybe a different spot would be more
advantageous? Perhaps it is the wrong time of the season to have a pole in the
water. In fishing, success boils down to the right bait, the right spot, the
right timing, and plenty of patience.
Today’s sellers are finding out the hard way that the “fishing is not great.” They are quickly realizing that selling a home in today’s market is not a quick and instantaneous process. Instead, it requires plenty of patience and persistence. There is a limited number of buyers in the marketplace due to affordability constraints. Yet, seller competition is at its highest level in years: there are plenty of other poles in the water.
With the increased competition, sellers have had to exercise considerable patience. Sellers who overprice their homes sit on the market without success. It is not a market to pad the asking price to leave room for negotiations. Price, condition, location, upgrades, and amenities all factor into the difference between success and languishing on the market.
An unbelievable 41% of all homes on the active listing inventory have been exposed to the market for more than 60 days. That is high considering 34% of the active listing market has come on within the last 30 days. Unsurprisingly, the luxury ranges take the longest to sell and have been waiting the longest to find success. Yet, many sellers in the most affordable ranges are sitting on the market waiting for a buyer to bring in an offer. Below $750,000, 40% of the market has had to wait 60 days or more without success. Between $750,000 and $1.5 million, a couple of the hottest price ranges, 35% to 36% have been waiting at least two months. It is 38% of all sellers between $1.5 million and $2 million. From there, the share of sellers who have been waiting to secure an agreed-upon offer grows between 43% to 64%, nearly two-thirds.
The storyline for 2025 is that there are far more sellers this year compared to the last several years, yet year-over-year demand has been almost unchanged. Currently, the supply of available homes has climbed to 15,256, up 37% compared to last year and 98% higher than in 2023, nearly double. Demand, on the other hand, is 4% lower than last year and 4% lower than in 2023. As a result of increased supply and nearly unchanged demand, the Expected Market Time (the number of days it takes to sell all Los Angeles County listings at the current buying pace) is at 128 days, its highest level for mid-July since tracking began in 2012. It was at 90 days last year and 62 days two years ago.
The storyline for 2025 is that there are far more sellers this year compared to the last several years, yet year-over-year demand has been almost unchanged. Currently, the supply of available homes has climbed to 15,256, up 37% compared to last year and 98% higher than in 2023, nearly double. Demand, on the other hand, is 4% lower than last year and 4% lower than in 2023. As a result of increased supply and nearly unchanged demand, the Expected Market Time (the number of days it takes to sell all Los Angeles County listings at the current buying pace) is at 128 days, its highest level for mid-July since tracking began in 2012. It was at 90 days last year and 62 days two years ago.
Affordability has remained relatively unchanged, and so have demand levels. With so many sellers competing against each other, homes have been sitting on the market for much longer this year. The Spring Market and half of the Summer Market are in the rearview mirror. As the upcoming school year draws closer, the window of opportunity to take advantage of the summer season is closing. As a result, an increased number of sellers are throwing in the proverbial towel, pulling their homes off the market, and changing their real estate plans. Some may come on the market later this year. Others will wait until the spring. Many will ultimately wait until housing shifts back in favor of sellers down the road.
In June, 2,976 sellers threw in the towel, the most since December 2018. That is 20% of the total active inventory. From January through June, 15,193 seller have pulled their homes off the market, which is up 93% compared to last year, nearly double. Cyclically, the number of homes that come off the market rises from month to month through the end of the year. Expect many more homes to be pulled from the active inventory going forward as housing transitions to its slower seasons.
As the best time of the year to sell, the Spring and Summer Markets, come to a close, careful, deliberate pricing is absolutely essential in securing success. There will be many more sellers this year who will be unable to isolate a buyer willing to bring in an offer to purchase. Contracts will expire. Thus, the number of homes pulled off the market will spike as the year progresses.
