With inventory tight throughout the South Bay, and the 40% or greater price increases in the Beach Cities, Westchester, and the Westside, it’s no wonder buyers are turning to areas that once struggled in the depths of the market lows in 2011 and 2012. As a result, prices have rebounded strongly in 2017, and as it stands today, demand is outpacing supply, creating a micro seller’s market. The chart below gives a great visual example of this market rebound, and as long as rate increases are tempered, we expect prices will continue to grow.
Low inventory is partly responsible for the high prices. The chart below highlightss where inventory is as of the end of February on a month’s supply basis. Current inventory is less than 1 month’s supply (a balanced market is considered 5-7 months supply); in other words, it would take less than a month at the current purchase rate to exhaust the available inventory. This is a true seller’s market.