L.A. Home Sales Soar as California’s Housing Market Defies
Covid
By Alexandre Tanzi
November 21, 2020, 11:00 AM GMT
Millions of
well-qualified millennials are shopping for homes
2021 likely to be
best year for sales since 2006, Zillow says
Home-buyers across California’s biggest cities have shown no
let-up when it comes to betting on real estate.
When it comes to L.A. real estate, “Sunset” is still selling
-- even nine months into the pandemic.
With interest rates at some of their lowest levels ever,
many renters are reassessing their housing options, said Jason Oppenheim, star
of “Selling Sunset,” a Netflix
reality series featuring a team of brokers and the glitzy properties they’re
selling across Los Angeles.
“Let’s face it, the
1% are doing very well right now, with markets at all-time highs and
interest rates extremely low,” said Oppenheim, who runs his Oppenheim Group
brokerage along Sunset Boulevard, which the show’s built around. “Houses are
affordable right now and people want to get out of their cramped apartments.”
Los Angeles isn’t alone. Since Covid-19 was declared a
public health emergency in March, home-buyers across California’s biggest
cities have shown no let-up when it comes to betting on real estate.
Along with Los
Angeles, San Jose, San Diego, Sacramento and San Francisco were the U.S.
markets with the biggest jump in new mortgages during the third quarter,
according to research by ATTOM Data Solutions, which tracked metro areas
nationwide with at least 1 million people. And that happened in the three
months that saw a record increase in the number of residential purchase
mortgage originations in the country.
What Pandemic?
Nationally, lenders issued roughly 1.05 million home-purchase
mortgages in the third quarter, up 25% from the same period in 2019, ATTOM’s
data showed. New home loans accounted for about 34.5% of total mortgage
activity last quarter.
“The housing market is still operating as if the recession
brought on by the pandemic didn’t exist,” said Todd Teta, ATTOM’s chief product
officer. “Buyers and owners, lured by low mortgage rates, kept lining up for
loans at levels not seen in more than a decade.”
Along with renters, younger buyers are entering the market.
“The simple fact is that millions of well-qualified
millennials are seriously shopping for houses, and they are competing for a
shortfall of homes for sale,” said Jeff Tucker, senior economist at the real
estate company Zillow.
Intense demand in a tight market has pushed month-over-month
and quarterly home-value growth to levels not seen since 2005, according to
Zillow.
The tight supply is
reflected in many California markets, where “for sale” signs quickly disappear
from front yards. Listings in Los Angeles were down 17.5% from a year ago for
the week ending Nov. 14. In San Diego, they’re 33% lower, and listings dropped
37.2% in Sacramento. In Riverside, east of Los Angeles, they declined by almost
half, Zillow’s data showed.
Some of the new buyers are going straight for high end after
amassing fortunes from the technology boom. The tech-heavy Nasdaq Composite
Index reached a record in the third quarter and is hovering near that level,
while the S&P 500 Index hit a new high earlier in the week.
“Instagram, TikTok, YouTube, young people are killing it out
here,” Oppenheim said. “I am selling a
ton of $5 million to $10 million dollar homes to people on social media.”
Still, not all markets are outperforming, as job losses from
the pandemic continue to weigh on consumer confidence elsewhere in the U.S.
Teta at ATTOM cautioned that “the pandemic and other factors could come
together and halt the market boom.”
Pittsburgh, Upstate
New York’s Rochester and Buffalo, Detroit, and New York City are among the
large metro areas that registered declines in mortgages from a year earlier.
Despite the mixed signals, Zillow anticipates 2021 will be
the best year for home sales since 2006.
“People have zero apprehension about buying into this
market,” said Oppenheim. “We’re probably going to see a few good years ahead of
us.”
No comments:
Post a Comment