COVID-19: Despite pandemic, 'remarkable' trend shows LA homes selling faster than previous year
The week ending August 1 saw homes selling eight days faster than same week in 2019. Experts say changing needs during the pandemic as well as interest rates could be factors in this pattern.
LOS ANGELES (KABC) -- Record unemployment and the COVID-19 crisis hasn't seemed to scare buyers away from purchasing houses in the Los Angeles area. In fact, they're buying them faster than they were in nearly all of 2019.
"It is quite remarkable that in the midst of a global pandemic that homebuyers are rushing into the market," said Dr. Lawrence Yun from the National Association of Realtors.
After a rise in the number of days homes sat on the market in April and May, June numbers dropped and continued through July, according to an ABC7 analysis of Zillow data in the Los Angeles metro area.
The week ending August 1 saw homes selling four days faster than in May and eight days faster than same week in 2019.
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And it isn't necessarily because homes are cheaper. According to Zillow's Home Value Index numbers, single family home values have risen steadily by about 4% from $697,000 in June of last year to about $728,000 this year.
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Real estate experts said first time homebuyers are driving growth but some existing homeowners are also buying new homes because COVID-19 has changed their lives.
Homeowners and buyers encouraged to look into record-low interest rates
"Many companies are offering work from home capability so that means you need to have an office from home," Yun said, adding some might be looking for a second office for their spouse or a larger backyard.
Yun said it's also about low interest rates: 30-year loans have rates well below 3%.
"Never thought I would see it that low, I mean they're low but I never thought we'd get this low," he said.
And as more people buy, the number of available homes has dropped as well, resulting in bidding wars.
"This is the time and the opportunity to buy a house but I think it's really important that before you buy a house...make sure that it's something you can afford," said Brian Gilder, a Los Angeles-based financial expert.
Some homeowners are deciding to refinance, but Gilder warned homeowners to be careful.
"Make sure you check what they're trying to charge you in fees and points and so forth," he said. "You might think you're saving money, you might not actually be saving money. You really want to look at your amortization schedule."
Some financial experts believe interest rates could go even lower. So, many buyers may face a decision of whether to lock in a purchase now or take a chance and wait.
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