Westside Los Angeles Real Estate Market Report

Westside Los Angeles Real Estate Market Report

It can be hard to understand the Los Angeles real estate market by watching national trends. And it can be deceiving to try to figure out what's happening in your neighborhood by looking at Los Angeles as a whole because each neighborhood can be its own universe. 

So for our market report that we'll update monthly, we've divided Los Angeles into three luxury real estate areas as follows:

  • North Beach area, including the Pacific Palisades, Santa Monica, and Venice.

  • Westside, including Beverly Hills, Brentwood, West Hollywood, and Westwood.

  • South Bay, including Hermosa, Manhattan Beach, and Redondo.

Quick Take:

  • The median single-family home prices and average price per square foot were mixed across markets from September to October. Price per square foot gives a more accurate picture for the selected areas. Year over year, North Beach and the South Bay are flat, while the Westside is up 4% in terms of price per square foot.
  • In the selected markets, only North Beach inventory and sales rose year over year. The South Bay sales notably dropped in October, but this is most likely an outlier month, which happens from time to time.
  • Buyers have been negotiating harder as the cost of financing rose higher over the past three months, and sellers are receiving a smaller percentage of asking price on average.

Price per square foot declined significantly from September to October in North Beach and the South Bay

Home prices and inventory in luxury markets continue to buck seasonal trends, showing considerable variability month to month in terms of median price and average price per square foot. The unique homes, higher mortgage rates, and low inventory have all contributed to these volatile price trends. Year to date, median prices increased in North Beach and the Westside and declined in the South Bay. However, price per square foot rose in the Westside and the South Bay, but declined in North Beach. In markets with high variability month to month, it can be hard to identify the signal from the noise. When we look over the past two years, prices have moved horizontally with high variability around the average.
Luxury markets tend to be affected more acutely by higher interest rates due to the absolute dollar cost of financing. With mortgage rates at a 23-year high, homebuyers aren’t willing to pay for anything less than the right home for them, and even then, they may still want concessions.

North Beach sales increase month over month

Inventory, sales, and new listings in the selected areas haven’t trended together. North Beach inventory has slowly but steadily increased since January 2022 because new listings outpaced sales. When we compare the first 10 months of 2022 to 2023, North Beach new listings have increased by 7%, while sales declined 21%. The Westside and the South Bay both have had fewer homes come to market than last year, down 4% and 15%, respectively. Generally, fewer new listings equate to fewer sales, and sales declined 27% in the Westside and 15% in the South Bay. South Bay homes are generally less expensive than in North Beach or the Westside, which equates to more market participants, so sales declined less.
As demand slows, buyers are gaining more negotiating power and paying less than asking price on average. From July to October 2023, the average seller received 3% less in North Beach, and 2% less in the Westside and the South Bay. That being said, inventory will almost certainly remain historically low for the rest of the year, and will likely remain low in 2024, which will create price support and at least minor competition among buyers.

Months of Supply Inventory indicates North Beach and the Westside favor buyers, while the South Bay favors sellers

Months of Supply Inventory (MSI) quantifies the supply/demand relationship by measuring how many months it would take for all current homes listed on the market to sell at the current rate of sales. The long-term average MSI is around three months in California, which indicates a balanced market. An MSI lower than three indicates that there are more buyers than sellers on the market (meaning it’s a sellers’ market), while a higher MSI indicates there are more sellers than buyers (meaning it’s a buyers’ market). Luxury markets tend to have higher MSIs because there are fewer market participants. In October, MSI in North Beach and the Westside remained high, meaning the market still favors sellers. South Bay MSI nearly doubled from September to October, which technically indicates a shift from a sellers’ market to a buyers’ market. However, this is almost certainly an outlier month, which will be corrected next month. The South Bay is still in a sellers’ market.
Looking for more information? Send us an email at [email protected] and we'll set up a time to chat!

Let's Connect

You've got questions and we can't wait to answer them.
Image Form