The Winter Market
After an exceptionally chilly start to the year, the Los Angeles County housing market is about to heat up with soaring buyer demand.
So many are anticipating the return of the summer Olympics to Los Angeles in 2028. The opening ceremonies, track and field, swimming, basketball, soccer, gymnastics, cycling, volleyball, and a variety of other sports are all converging on Southern California in 2½ years. Just about everyone has their favorite. For those who want to attend one of the events in person, the presale registration opened up on January 14th at 7 a.m. There were over 1.5 million ticket registrations in the first 24 hours, the most in Olympic history. There was so much interest that wait times exceeded an hour. Demand for tickets surged, and the LA28 Olympic Committee expects to sell 14 million tickets, breaking the record set at the Paris 2024 Games.
Now that housing has reached mid-January, it feels like tickets just went on sale for buyers to tour houses, write offers, and secure their next home. While the Los Angeles County housing market is not going to set any sales records, housing demand will surge higher over the next several weeks. Housing is transitioning from the Holiday Market, which runs from mid-November through the first couple of weeks of the New Year, the slowest time of the year with very little buyer activity, to the Winter Market, running from mid-January through mid-March, when buyer demand explodes higher. The supply of available homes increases, but at a slower pace than demand, leading the market to accelerate noticeably.
Regardless of the year or economic conditions, the housing market always improves dramatically starting in mid-January. Buyer demand (a snapshot of the number of new pending sales over the prior month) rockets higher. It started the Winter Market last year with 2,303 pending sales, and by mid-March, demand had grown to 3,810, an increase of 1,507, or 65%. In 2023, it jumped by 60%, and in 2024, it grew by 49%. The 3-year average before COVID (2017-2019) was a 49% rise.
The supply of available homes, on the other hand, rises much more slowly than demand. The inventory to start the Winter Market last year was 9,668, and by mid-March, it had grown to 11,469, an increase of 1,801 homes, up 19%. In 2023, it dropped by 12%; in 2024, it rose by 7%. The 3-year average before COVID was a 3% increase.
With demand soaring while inventory climbs more slowly, the market accelerates rapidly from week to week. Last year, the Expected Market Time (the number of days it takes to sell all Los Angeles County listings at the current buying pace) was 126 days in mid-January and decreased to 90 days in mid-March, a noticeable 36-day drop. In 2023, it plunged by 48 days, and in 2024, it dropped by 26 days. The 3-year average decline before COVID was 29 days.
Demand will increase substantially from now through mid-March. Today’s 2,238 demand reading is the lowest since 2023. The pre-pandemic average was 3,170, a sizable 64% more than today. Nonetheless, there will be a lot more activity. An increasing number of buyers will begin searching for a home. The number of new prospective buyers will outpace the number of homes coming on the market, even at these muted levels.
Many wonder why the market improves so rapidly in January and February. It all boils down to supply and demand. The hordes of buyers who placed their home searching efforts on hold to enjoy the holidays reemerge and jump right back into the housing market in mid-January. With today’s lower mortgage rate environment, between 6% and 6.5% since September 3rd of last year, affordability has dramatically improved compared to 2025, when it was stuck above 7% to start the year. Today’s 6.07% rate is a whole percentage point better than last year’s 7.07%. In fact, rates have not been at these levels for a duration since the Federal Reserve began increasing the Federal Funds rate in 2022.
Yet, the inventory does not increase as rapidly as demand. Many sellers wait until the Spring Market, when demand hits its annual peak, the busiest time of the year. It is also when more homes are listed for sale. January and February are slower months for new sellers. February is the third-lowest month of the year for new FOR SALE signs, only behind November and December. January is not much different. The pace of homes coming on the market does not really accelerate until the end of March, the start of spring.
The Winter Market has officially arrived. Buyers are finally back, and they are matched up with a limited number of available homes to start the year. Prepare for launch!
