Los Angeles County, hit hard by the 2008 recession, never returned to Millennium Boom levels in terms of home sales volume and construction. LA recovered the number of jobs lost during the recession at the end of 2014, reaching a full recovery when counting population gain in 2019, just in time for the next recession to hit in February 2020.
The long home sales volume recovery in Los Angeles County was driven primarily by investors. But the housing market began to show more life from owner-occupants as employment and incomes improved beginning in 2017. Then, as buyer-occupants fought against rising mortgage rates, they became more cautious, causing sales volume to fall in 2018-2019.
In 2020, interest rates plunged to historic lows. But low interest rates haven’t been enough to induce sellers who are unable or unwilling to list in light of the job losses stemming from the pandemic and underlying recession. This has resulted in a strangled MLS inventory, accelerating prices to unsustainable heights. As we continue through the recession hangover, expect to see home sales volume continue its volatile path, not to begin a consistent recovery until around 2024. Today’s rising home prices will be brought down by the end of the foreclosure moratorium heading into 2022, which has thus fast kept roughly 3% of California’s mortgaged homeowners in their homes, despite being delinquent on their mortgages.