We recently wrote about the impact of the coronavirus pandemic on the single family home real estate market in Los Angeles. In this article, we summarize the impact of the pandemic on the condo market, and we discuss how and why the pandemic impacted the condo market differently than the single family home market.
Supply Spikes After Covid As Buyers Turn To Single Family Homes
As we previously discussed, supply and demand for real estate are generally seasonal and cyclical, with supply and demand peaking during summer months and reaching their lowest levels during the winter. This cycle was interrupted by the coronavirus pandemic, which resulted in an unusual drop in supply in March and April of 2020 due to lockdown orders. After April, supply began to recover. However, the number of available single family homes for sale did not recover to previous levels, resulting in a supply drop of about 25% in the summer in comparison to previous years, as discussed in our prior post.
Supply of condos, on the other hand, spiked dramatically after the pandemic. As shown in the below graph, the number of condos for sale in the summer of 2020 exceeded condos for sale in previous years. This is likely attributable to (1) condo owners no longer placing high value on living in close proximity to offices in areas like Downtown due to the ability to work from home and (2) condo owners and buyers placing higher value on outdoor/yard space due to closure of businesses and outdoor activities.
Los Angeles County Condos For Sale Per Month
Demand Drops But Quickly Recovers And Surges In 2021
With homeowners forced to stay at home and businesses closed, demand for condos predictably precipitously dropped immediately after March of 2020, into April and May of 2020. Again, this is likely attributable to buyers placing less emphasis on living close to office buildings, and placing more emphasis on single family homes with yard space. However, demand rebounded quickly and returned to normal levels in the summer of 2020. Perhaps more notably, demand for condos began to surge in early 2021, reaching higher levels than in previous years.
Los Angeles County Closed Condo Sales Per Month
Higher Prices Lag In 2020 But Increase In 2021 With Increased Demand
Unlike prices of single family homes, condo prices did not experience a surge immediately after March of 2020. Instead, after prices dropped, they rebounded to just slightly above pre-pandemic levels and evened off into the winter months. However, early 2021 saw a sharp increase in the median price per square foot of condominiums, likely driven by the increase in demand discussed above. The graph below shows the monthly median price per square foot and depicts the sharp increase in the first half of 2021.
Los Angeles County Condo Median Price Per Square Foot
What Does This Mean For The Future?
It is clear that the one of the initial impacts of the coronavirus pandemic was to put downward pressure on the condo market – supply increased substantially, demand remainder relatively the same, and prices were relatively stable. As we’ve grown accustomed to living in a post-pandemic world and shops, restaurants, and entertainment have reopened, buyers have begun to shift their interest back toward condos. This is likely also attributable to the earlier surge in prices of single family homes, thereby making the affordability of condos more attractive. With home prices continuing to steadily increase, and as people begin to return to their offices, we anticipate that buyers will continue to look to condos as viable alternatives to single family homes. Whether that increase in demand outpaces increased supply remains to be seen, but we expect condo prices to continue to steadily increase.
For more information on how Esquire Real Estate Brokerage, Inc. can help you in the Southern California real estate market, feel free to give us a call at 213-973-9439 or send us an email at firstname.lastname@example.org.