Impact of The Pandemic on the LA’s Condo MarketOctober 27th, 2021 by Administrator
The COVID-19 Pandemic and lockdown drastically impacted the real estate market. But now, things are getting back to normal once again. The demand and supply for real estate are typically seasonal and cyclic. The supply and demand peak during the summer months and reach their lowest levels during the winter.
Inventory of property for sale declined drastically in April 2020, right after the lockdown. But the supply rebounded during the summer months, but not to the same level as 2019. Also, supply reached relatively new lows in the winter of 2020-21. However, the supply and demand have increased since then.
The supply of condos, however, spiked significantly after the pandemic. The number of condos for sale in summer 2020 exceeded condos for sale in 2019. According to most real estate agents, that’s mainly because
- Condo owners did not place a high value on living close to the office in areas because of the work from home.
- Condo owners and buyers placed a higher value on outdoor space due to the closure of businesses and outdoor activities.
The Current Condition of L.A.’s Condo Market
Demand for condos is increasing, but bargains are hard to come by anywhere in the expensive and hyperactive LA real estate market. According to a report, the number of condo units sold in June 2021 shot up nearly 88% year over year to 1,941.
That has led to an increase in prices. The median condo sales price is up 22.5% year over year to $635,000. The reasonable rates of condos are allowing many buyers to move to LA.
Condos equipped with different amenities like in-unit laundry and outdoor spaces are selling quite well right now, while the top-end of the condo market is breaking records.
New Buyer Pool in LA Market
Currently, there are a lot of buyers from out of town. People are now relocating to Los Angeles from different cities for several reasons, be it school or job. And these people are not first-time buyers.
In the early days of the Covid-19 pandemic, most buyers were local, but now there are more potential buyers from different cities and states. Because of this reason, some Los Angeles developers are planning more condos.
What does this indicate for the future?
The initial impacts of the Covid-19 pandemic placed downward pressure on the LA’s condo market – supply increased substantially, demand remained relatively the same, and prices were stable.
As people are now accustomed to living in the post-pandemic world, buyers have begun to shift their interest back to condos. That is more likely caused by the earlier surge in prices of single-family homes, thereby making the affordability of condos more attractive.
With LA’s property prices continue to increase and things getting back to normal, buyers will more likely consider condos as viable alternatives to single-family homes.