Key Market Takeaways
- Inventory: New listings increased only 1% MoM, which is not an encouraging sign for a balanced market during the thick of the spring selling season.
- Sales: Closed sales rose 5% this month, though they remain down 4% compared to this time last year.
- Pricing: For the first time this year, Los Angeles home prices increased both YoY and MoM, with the median sale price up 2% annually.
| Metric | Year-over-Year (YoY) | Month-over-Month (MoM) |
| Homes for Sale | -1% | +4% |
| New Listings | -4% | +1% |
| Homes in Escrow | -5% | -1% |
| Closed Sales | -4% | +5% |
| Median Sale Price | +2% | +4% |
FAQS
Are Los Angeles home prices still increasing?
Yes. For the first time this year, prices increased both YoY and MoM. This came as a bit of a surprise, as the market as a whole has been very sporadic. However, as I mentioned in my report last month, I am seeing more properties sell at or above the asking price than last year.
Why are mortgage rates rising again?
Inflation. The latest reports show that inflation is worse than the market expected, causing the bond market to jump and, in turn, mortgage rates to rise. Now that those impacts are fully realized in the numbers, we won’t see any stability with mortgage rates until the conflict in Iran is resolved.
Is now a difficult time to sell a condo in LA?
Absolutely. As I've talked about before, condos are having a really tough time in the real estate market due to increasing HOA fees, special assessments, and insurance costs. Furthermore, banks have started changing their lending requirements for condo buildings. If the bank can't approve the building, the buyer's loan will be denied, even if the buyer can easily afford it.
DEEP DIVE: MAY 2026 MARKET ANALYSIS
The Market Now
The market has felt unusual, soft, sporadic, fragmented, hard to predict, and overall inconsistent, just to name a few. Yet, prices were up for the first time this year, both YoY and MoM. Something that will most likely contribute to continued price increases is the lack of new inventory. Having only a 1% increase in new listings MoM, when we’re in the thick of the Spring selling season, isn’t a good sign for a balanced market.
The Impact of Global Uncertainty
Most of the conditions I mentioned are driven by uncertainty surrounding the war in Iran, and there is hope it will be resolved shortly. If it does, there is a belief that perhaps the spring market will be later in the year. Typically, here in L.A., the summer months are slower. This year, the summer months may be busier than usual because the spring selling season has been so slow. If the inventory remains constrained but there are still enough motivated buyers, prices will remain steady or perhaps even slightly increase, leading up to those potential busier summer months.
Stock Market Influence on Real Estate
A potential reason prices increased despite higher rates is that the stock market is at an all-time high, with more people invested in it than ever before. Those buyers are potentially selling off some of their positions to purchase a home and putting more money down, so their monthly payments are manageable despite the high interest rates.
Navigating "Weird Times"
The reason for this is that the real estate market over the past few years hasn't been normal. When you look back to the previous years, when mortgage rates were going up, but prices were remaining steady or even increasing, that wasn’t normal. Now, there are some areas where homes are selling for very high prices, whereas other areas or properties are struggling. It's just weird times we're in, and pinpointing exactly what the real estate market is doing or going to do is very challenging.
Mortgage Rates and Inflation
I started writing this paragraph last week, and I was going to say that, despite all that's going on, mortgage rates are only roughly .50% lower than they were this time 12 months ago. Then, all of a sudden, this week, the latest reports show that inflation is worse than the market expected, causing the bond market to jump and, in turn, mortgage rates to rise. So now rates are about .35% lower than this time last year.
The State of the Condo Market
As I've talked about before, condos are having a really tough time in the real estate market due to increasing HOA fees, special assessments, and insurance costs. The banks have started changing their lending requirements for condo buildings. If the bank can't approve the building, the buyer's loan will be denied, even if the buyer can easily afford it. There was also a recent report from Attom that condo prices in Southern California experienced their biggest YoY decrease in 14 years. Buyers are being extremely picky with condos. If you are thinking about selling, your condo needs to be updated, in a good location, and priced extremely well.
Palisades Fire Recovery and New Builds
Prices continue to rise gradually, suggesting that sentiment is improving and buyers see value in purchasing the lots. Regarding the Palisades fire recovery, Pali Builds has been following the permits and certificate of occupancy filings with the city, and according to them, 99 permits were issued in April, and a total of 8 CofO’s have been issued since the fires. It’s taking on average 110 days from plan check to permit issuance.
