Giving Gratitude and Pausing to Reflect

Here at Highland Premiere, we are extremely thankful for our family, friends, and colleagues who have all given us the strength to keep our spirits high during these very uncertain times. Without all of them, we would not be where we are today. We’re also very thankful to our clients, who have entrusted us to represent them even in unprecedented market conditions to make the huge life decision of buying their home.

In addition, we are incredibly thankful for our first responders, teachers and all the people who save lives, humans and animals alike, as these are the people who step up so that the rest of us can rest. We are beyond privileged because of these people and it is something we will never take for granted. Now is a good time to pause and reflect on how fortunate we all are. 


Click Here For Our November 2021 Newsletter

Our team is committed to continuing to serve all your real estate needs while incorporating safety protocol to protect all of our loved ones.

In addition, as your local real estate experts, we feel it’s our duty to give you, our valued client, all the information you need to better understand our local real estate market. Whether you’re buying or selling, we want to make sure you have the best, most pertinent information, so we’ve put together this monthly analysis breaking down specifics about the market.

As we all navigate this together, please don’t hesitate to reach out to us with any questions or concerns. We’re here to support you.

– Vivian Yoon & Dennis Hsii , LIC #01925833 / 01919746

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The Big Story

Where can home prices go from here?
Quick Take:
• Home prices appreciated faster in 2021 than at any other time, even surpassing the 2004–2006 housing bubble
• Home prices will probably decrease before returning to a more reasonable growth rate.
• Home prices in the last 20 years increased at more than twice the rate of the median household income in California (142% vs. 65%).
• Despite record low inventory, home price growth is hitting a ceiling.
• The average 30-year fixed mortgage rate, while still historically low, rose to 3.14% at the end of October 2021.
Note: You can find the charts/graphs for the Big Story at the end of this section.


Highs (price) and lows (inventory) in the housing market

Income is one of the largest predictors of home price growth, second only to available supply. Consumers have more money to spend, which in turn drives up prices. But the increases in income haven’t kept up with the rise in home prices, especially in the last two years. In 2020, home prices increased 10% according to the Case-Schiller 20-City Composite Index, while median income decreased by 1%.

The disconnect between income and home prices is happening for two reasons. First, the ability to take on debt means that income doesn’t necessarily need to increase at a 1:1 ratio with home prices. Second, the pandemic changed buyer preferences, increasing the demand for homes and dropping inventory to previously unseen lows. 

Because home price increases outpaced income growth, homebuyers needed to take on more debt to buy a home than they would have a few years ago. But due to the drop in interest rates, the monthly payment, even on a higher-priced home, becomes more affordable. For every 1% decrease in a 30-year mortgage rate, the price of the home can increase 13% without a change in monthly payment (and vice versa). For example, the monthly payment on a $1,000,000 mortgage at 4% is almost identical to the monthly payment for a $1,130,000 mortgage at 3%, a $130,000 difference. 

The pandemic also changed buyer preferences. Rather than spending roughly half of our time at home, which is the norm, we were faced with endless time in our living spaces. (You remember — you were there.) As of September 2021, the United States has 59% fewer homes on the market, and 53% of that happened in the last two years. We were happy to see more homes on the market in the second quarter of 2021 because the increased supply helped satiate the high buyer demand, but we are already seeing the seasonal shift to fewer homes coming to market. Inventory will likely remain super low in the coming fall and winter months. 

The market remains competitive for buyers, but conditions are making it an exceptional time for homeowners to sell. Low inventory means sellers will receive multiple offers with fewer concessions. With so many moving parts in real estate transactions, working with an experienced real estate agent is essential in smoothly navigating the entire buying and selling process.


Big Story Data

The Local Lowdown

The market is cooling but it’s still not a buyers’ market

We break down three luxury areas in Los Angeles as follows:

Quick Take:

Note: You can find the charts/graphs for the Local Lowdown at the end of this section.


Single-family home prices moved like stocks in 2021

The growth rates in 2021 are highly unusual and unsustainable in these three luxury markets; for example, home prices would more than double every five years at a 15% growth rate (every four years at 20%). After huge single-family home price appreciation in the first half of the year, it made sense that prices pulled back in the summer months. From July–October, home prices declined in North Beach and the South Bay but remained historically high. West Side prices were the only exception, as they continued to appreciate and reached record highs in October. 

More supply, no problem

Despite the mild increase in single-family home inventory in 2021, we’re still at historic lows. August and September are typically the months with the highest inventory every year. In 2021, total inventory didn’t come close to last year’s level and was even further away from pre-pandemic levels. Even though we’re seeing some price correction after the first half of the year, the sustained low inventory will lift prices. Sales have been incredibly high, again highlighting demand in the area.

Homes are selling fast — really fast

Homes are selling extremely fast for these luxury markets. The Days on Market reflects the high demand for homes in these neighborhoods.

Months of Supply Inventory (MSI) quantifies the supply/demand relationship by measuring how many months it would take for all current homes for sale on the market to sell at the current rate of sales. The average MSI is 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). Currently, single-family home MSIs are historically low, indicating a sellers’ market in the South Bay and a more balanced market in North Beach and the West Side.

Local Lowdown Data

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There’s a saying, “As California goes, so goes the nation!” When it comes to building Accessory Dwelling Units (ADU), that’s also true, with the Los Angeles area currently the most prolific in ADU construction. So what exactly is an ADU? An ADU is a secondary building on your property and the purpose for adding one varies. You may want to build an ADU if you are looking to add a:


From a Trickle to a Torrent

Until the last few years, the California Department of Housing & Community Development saw relatively few applications for permits to build an ADU. In 2012, only 158 of those applications were filed. By 2017, those numbers had multiplied more than 30 times, with 4,974 permits requested, and the latest figures available from 2019 show 14,702 permits were issued to build an ADU in California.

The ROI of an ADU

In the past few years, as the result of housing shortage in Los Angeles, State Bills 8 & 9, the newest California laws, allow homeowners to build an ADU on smaller lots as a way of combating the housing crisis. This gives homeowners the flexibility of adding an income stream as well as adding value to their property. 

Humble Ly, President/Founder of Dakota Benjamin, Inc. is a contractor Highland Premier has worked with in the past who builds ADUs across Southern California. 

“An ADU can be a great asset to California homeowners,” said Ly. “It can provide extra income which could be used to help pay for your mortgage,” he said.

Ly is currently working with the City of Los Angeles to fast-track standardized ADU plans. The low range to build an ADU is between $150,000 to $180,000. For a 1,200 square foot unit, the cost can be up to $250,000. 

Our advice would be to first allow us to perform a cost benefit analysis consisting of cost vs. usage. This is the best method to determine whether the juice is worth the squeeze, as they say. Which means, how much time will it take to earn back the money you invested in an ADU? Another factor to consider is whether the best use of your money is to renovate your home instead of building an ADU.

What Type of ADU Suits You?

There are three types of ADUs: detached, attached and a two-story conversion. The City of Los Angeles is working to provide pre-approved building plans for ADUs with over-the-counter pull permits which will be available very soon.

The Upside of Building an ADU


Some Things To Consider

There are some downsides to consider. If you decide to rent out your ADU, you become a landlord and need to be aware of and adhere to code enforcement and rent control laws. Just as your new dwelling will need maintenance down the road, keep in mind the relationship with your new tenants may need work too. It’s a fact that when there is an increase in property value there is also an increase in property taxes. Lastly, consider that you may lose some privacy if you decide to rent out your ADU. Tenants will likely need parking, and will require 24/7/365 access to their rental on your property. 

Monitoring Housing Trends 

The ADU trend has been gaining ground for a few years and our experienced team at Highland Premiere is here to guide you through the decision of building an ADU, and the impact it may have on your home’s value or salability.

Contact Us

You’ve seen them online. Maybe you’ve used them. Automated home valuation tools estimate the worth of your home and give prices in neighborhoods that piques your interest. Those online tools are quick and easy way to view real estate trends over time, but much of the information they generate needs to be taken with a grain of salt.

Our advice is to try using valuation tools from different websites and see if the numbers match. Buyers need to be aware that these are not true valuations, and estimated prices don’t necessarily translate to sale prices. The tools can’t factor in home improvements, locations, views, etc.



At Highland Premiere, we know the real value of a home, calculated with current market trends. Our expertise allows us to understand the nuances, trends, and outside influences that can impact property values. We can show you the maximum potential value of a home, and the most accurate price. We are here to help you on your buying or selling journey.

Click Here For Our November 2021 Newsletter

Over the long term, owning your own home or condo is a smart investment that appreciates with time. Many of our clients see owning real estate as a means to generate future income potential. We are here to help guide your journey into investing in real estate, whether it’s a place you and your family will call home, or purely an investment property.

First Things First

Real estate is one the most expensive investments you can make and the first hurdle is coming up with your down payment. According to the National Association of Realtors, the average down payment for a home right now is 11 percent of the purchase price. There are different scenarios for down payment options like savings, gifts, retirement accounts, 401(k) and IRAs, and for first-time investors, there are FHA and other minimum down payment  programs.

We Are Your Neighborhood Experts

As you embark on your home buying journey, we are your eyes and ears. We look at more than just the physical property when it comes to investing in a home. We also evaluate the neighborhood for trajectory. What are the driving factors that make people want to move to this area? It could be the walkability score, the commute, access to public transit, schools, shopping, parks and recreational areas as well as dining and entertainment options.  We are also always looking out for new building construction, rehabilitation projects, and unique business openings. We collect and analyze all this data to provide you with a full picture of the neighborhood’s past, present, and future potential.

Hot Neighborhood Adjacent

Because of our years and years of experience in and around Los Angeles, we know there is great value in checking out neighborhoods surrounding a well-established and desirable area. Right next door to these areas are spillover markets, where the neighborhood is up and coming. You’ve probably seen the term “Beverly Hills-adjacent” — that’s the spillover neighborhood!  Being adjacent gives you access to the perks and amenities of the appealing neighborhood without the higher prices. Buying property in these neighborhoods requires patience in order to realize a big return on investment, but the patience can pay off in a big way.

Your Guiding Light

We will be your guides throughout the search for your real estate investment. We can show you the best location in the neighborhood, or in a condominium complex. We can place real value on every element of the property and provide the hard data you need to make an informed decision. Once we close the deal on your real estate investment, we will be there to celebrate with you, too. Take a look at what we’ve done for our clients so far!

Contact Us

At Highland Premiere, we listen and we care. It’s so important to customize our plans to each client’s unique needs. Over our years in the industry, we continue to make the home buying or selling process the best possible experience for you.

By treating our clients like family, we get to know them personally. That’s how we find the perfect home, exceed expectations, and celebrate when we reach the end of a real estate journey. It’s a gift that our customers pick us to be their trusted real estate team. And that’s why we, in return, give a personalized gift when they reach that final signature line.

Buying or selling a home is very personal, and it brings us so much joy to help our clients realize their goals.

Click Here For Our October 2021 Newsletter

Our team is committed to continuing to serve all your real estate needs while incorporating safety protocol to protect all of our loved ones.

In addition, as your local real estate experts, we feel it’s our duty to give you, our valued client, all the information you need to better understand our local real estate market. Whether you’re buying or selling, we want to make sure you have the best, most pertinent information, so we’ve put together this monthly analysis breaking down specifics about the market.

As we all navigate this together, please don’t hesitate to reach out to us with any questions or concerns. We’re here to support you.

– Vivian Yoon & Dennis Hsii , DRE #01925833 / DRE #01919746


See Your Home’s Value


Welcome to our October newsletter, where we’ll discuss residential real estate trends in the North Beach, West Side, and South Bay markets in Los Angeles and across the nation. This month, we examine the state of the U.S. housing market now that much-needed supply has come to the market. We also explore why the worker shortage may not be as detrimental to the economy as was originally expected because of the renewed growth of entrepreneurship.  

With the increase in supply, we’ll probably see the beginning of some market cooling — but in the context of the hottest housing market in history. Housing inventory in the United States continued to rise in August, up 30% from the record low in April 2021. We’re happy to see more homes on the market because they will help satiate the high buyer demand. Although this increase in housing inventory is meaningful, there are still 74% fewer homes on the market than a year ago. The housing market will likely start to see some price corrections as it returns to a steadier state of growth. 

While we, at first, worried that the worker shortage could hurt the economy, it looks like the rise in entrepreneurship is helping to boost production and improve the economy. We often look at jobs to gauge the health of the economy: more employed workers usually mean more production and more wealth, which, in turn, means appreciating asset prices. For many months, unemployment stood at around 10 million workers; however, we have started to meaningfully close the unemployment gap, and unemployment has been reduced to 8 million workers. As risks from the delta variant wane, we’ll likely see more unemployed workers reentering the workforce. 

Despite the high rate of unemployment and record number of job openings, U.S. production is climbing rapidly. In terms of GDP, which is the broadest measure of goods and services produced, our economic recovery could reach where we would likely be if the pandemic had never happened within the next year. It cannot be overstated how rare it would be to return to pre-recession GDP, but we might just get there. A potential factor in the rise of both production and job openings is the resurgence of entrepreneurship, which is often associated with higher production. 

We remain committed to providing you with the most current market information so you feel supported and informed in your buying and selling decisions. In order to better explore how the above national trends in the economy and housing market are affecting Los Angeles, this month’s newsletter will cover the following:


Key Topics and Trends in October

In the long term, employment and GDP reveal much about the economic climate and typically trend with housing prices. GDP, according to the U.S. Bureau of Economic Analysis, gained 1.6% quarter-over-quarter in 2nd Quarter (2Q) 2021, which is about 1% higher than the long-term quarterly growth rate of 0.6%. To get back to pre-pandemic GDP levels, we need to continue to outpace the long-term growth rate. The substantial infusion of cash into the economy has boosted GDP, and we are on pace to fully recover. 

The chart below illustrates the cost of the COVID recession and the projection at GDP’s current growth rate. While it depicts U.S. GDP from 2016 to 2Q 2021, it also illustrates economic patterns that occur in all recessions. GDP tends to grow at a fairly consistent rate during economic expansions. The green line exemplifies the expected GDP, had the pandemic never happened. As that green line shows, we are below where GDP was expected to be in 2Q 2021. In other words, we’re still underwater. However, unlike typical recoveries, which return to a steady state of growth but at a lower level, the current growth rate is far higher than normal and should bring us back to our pre-pandemic trajectory by the end of the 2nd Quarter 2022.

Another large government-sponsored infusion of cash into the economy is very unlikely to happen. We may, however, have another source of economic stimulus: the massive growth in entrepreneurship over the last 16 months. From 2004 to 2019, the United States averaged 2.8 million new business applications per year. In 2020, there were 4.36 million, and in 2021, there have been 3.68 million as of August. This means that over the past 20 months, the United States has seen 8 million new business applications.

The competitive nature of our economy incentivizes new business owners to produce, creating jobs and stimulating growth. While new businesses are not as stable as more mature companies, they are often more nimble than larger companies and can produce with fewer hurdles.

The large number of new business applications may also explain why established companies have found it difficult to fill job openings. It seems that a large number of workers may now be working for themselves. Although the difficulty with hiring employees poses troubling challenges to employers, it thankfully may not indicate a struggling economy.

Home prices tend not to experience meteoric rises if the economy is in dire straits. Because home prices have increased so rapidly over the last two years, we can assume that the economy is doing well. In the last five years, housing inventory has decreased by around 940,000 (59%). Over 700,000 of those homes were sold in the last two years alone. Due to the pandemic, housing demand rose to historically high levels and mortgage rates fell to historic lows. As shown in the chart below, we’re currently hovering near all-time low mortgage rates, which will likely remain for the rest of the year. Low rates incentivize buying due to the lower monthly payment.

Even with rising inventory, the market remains competitive for buyers, but conditions are making it an exceptional time for homeowners to sell. Low inventory means sellers will receive multiple offers with fewer concessions. Because sellers are often selling one home and buying another, it’s essential that sellers work with the right agents to ensure the transition goes smoothly.


October Housing Market Updates for selected
Los Angeles areas


In this newsletter, we break down three luxury areas in Los Angeles as follows:

During September 2021, the median single-family home price rose in North Beach and the South Bay to new all-time highs. West Side prices declined slightly month-over-month but are still historically high. Year-over-year, single-family home prices increased across the selected Los Angeles areas.

Single-family home inventory grew much higher for North Beach and the West Side in 2020 relative to 2019, while the South Bay trended similarly to 2019 (a “normal” year) in 2020. The unusual spike in inventory was short-lived due to demand in the area. In the selected markets, inventory retracted as quickly as it increased and is now trending lower than pre-pandemic levels. Since the start of 2021, more new listings have been coming to market, but these were met with increased sales. Demand in the area is significantly higher than last year, and we expect many of the new listings that come to market this fall to be absorbed quickly. The sustained low inventory will likely cause prices to appreciate throughout 2021.

Days on Market has risen recently. However, homes are still selling relatively quickly for luxury markets. As we’ll see, the pace of sales has contributed to the low Months of Supply Inventory (MSI) over the past several months.

We can use MSI as a metric to judge whether the market favors buyers or sellers. The average MSI is three months in California, which indicates a balanced market. An MSI lower than three means that there are more buyers than sellers on the market (that is, it’s a sellers’ market), while a higher MSI means there are more sellers than buyers (that is, it’s a buyers’ market). In September 2021, the MSI remained low in the South Bay, highlighting the demand in the area. North Beach and the West Side are more balanced with MSIs near four.

In summary, the high demand and low supply in the selected Los Angeles areas have driven home prices up over the last year, but the huge price appreciation is slowing. Inventory will likely remain historically low this year with the sustained high demand in the area. Overall, the housing market has shown its value through the pandemic and remains one of the most valuable asset classes. The data show that housing has remained consistently strong throughout this period. 

We expect the number of new listings to slow in the coming months. However, the current market conditions can withstand a high number of new listings, and more sellers may choose to enter the market to capitalize on the high buyer demand. We expect the high demand to continue, and new houses on the market to sell quickly.

As always, we remain committed to helping our clients achieve their current and future real estate goals. Our team of experienced professionals are happy to discuss the information we’ve shared in this newsletter. We welcome you to contact us with any questions about the current market or to request an evaluation of your home.

Subscribe To Our Newsletter Here

Buying a home is life-changing. At Highland Premiere family, we get it. We’ve walked a mile in your shoes. Most of our team members are homeowners, and we’ve personally been through the process of buying or selling a home. We always remember our experiences to make sure we create a positive real estate journey for you.

We want you to have what you’re looking for at the best price. Whether you are a first-time homeowner or looking to move, our Highland Premiere family is here to support you.

Click Here For Our October 2021 Newsletter

Our team is committed to continuing to serve all your real estate needs while incorporating safety protocol to protect all of our loved ones.

In addition, as your local real estate experts, we feel it’s our duty to give you, our valued client, all the information you need to better understand our local real estate market. Whether you’re buying or selling, we want to make sure you have the best, most pertinent information, so we’ve put together this monthly analysis breaking down specifics about the market.

As we all navigate this together, please don’t hesitate to reach out to us with any questions or concerns. We’re here to support you.

– Vivian Yoon & Dennis Hsii , DRE #01925833 / DRE #01919746


See Your Home’s Value


Welcome to our August newsletter, where we’ll explore residential real estate trends in the North Beach, West Side, and South Bay markets in Los Angeles and across the nation. This month, we examine the state of the U.S. economic recovery using Real Gross Domestic Product (GDP)1, the potential effects of the Delta variant on the housing market, and the ways in which the homebuyer profile changed over the last year.

In terms of GDP, which is the broadest measure of goods and services produced, our economic recovery stands at about 70% of where we would likely be if the pandemic had never happened. Unfortunately, the Delta variant has diminished the likelihood of the pandemic ending with any sort of speed and caused a return to mask mandates in many parts of the country. Although full lockdowns are unlikely, high case counts and a return to near-universal masks and social distancing will disrupt our economic recovery. 

The uncertainty surrounding the Delta variant and its effects on the economy caused rates to fall. Participants in our financial markets know that the Federal Reserve will try to stabilize the U.S. financial markets in times of uncertainty. At this point, it’s a given. The further decline in interest rates reflects that. Mortgage rates are now extremely close to the all-time low. At the same time, however, prices have risen, and the profile of homebuyers has shifted. More homebuyers are investors and full-cash buyers. With low-rate financing and a high number of qualified buyers, the rising prices haven’t reduced the demand for homes as one might expect. 

As we navigate this period of high buyer demand and low supply, we remain committed to providing you with the most current market information so you feel supported and informed in your buying and selling decisions. In this month’s newsletter, we cover the following:

1Real GDP is inflation-adjusted GDP. All references to GDP use Real GDP figures.

Key Topics and Trends in August

We’re about a year past the initial economic devastation caused by the pandemic. The second quarter of 2020 saw the largest single-quarter drop in GDP in history (-9%). GDP and employment together reveal much about the economic climate and typically trend with housing prices, but they do not explain the current rise in home prices. We’ll still discuss GDP and employment, however, because they are useful longer-term indicators. 

The U.S. Bureau of Economic Analysis reported a 1.6% quarter-over-quarter gain to GDP in 1st Quarter (1Q) 2021, which is about 1% higher than the long-term quarterly growth rate of 0.6%. We need to outpace the long-term growth rate to get back to pre-pandemic levels. If it weren’t for the Delta variant, we might actually get there. The substantial infusion of cash into the economy has boosted GDP, but we’re still only at 70% of pre-pandemic levels. At the same time, there are about 10 million fewer jobs due to the pandemic. As the Delta variant runs through the country, our recovery will likely stall and the loss in GDP could be permanent. 

The chart below illustrates the cost of a recession. While it depicts U.S. GDP from 2016 to 1Q 2021, it also illustrates economic patterns that occur in all recessions. GDP tends to grow at a fairly consistent rate during economic expansions. The green line illustrates the expected GDP had the pandemic never happened. As that green line shows, we are 30% below where GDP was expected to be in 1Q 2021. In other words, we’re still underwater despite the impressive quarterly increases in GDP.

The fresh uncertainty surrounding the Delta variant caused rates to drop. The Federal Reserve is expected to support the financial markets by infusing money into them, which lowers rates and, in this instance, causes inflation to rise. As shown in the chart below, we’re currently hovering at historically low mortgage rates, which will likely remain for the rest of the year. Low rates and inflation both incentivize buying. When consumers know that the dollar’s purchasing power is diminishing quickly, it makes more sense for them to buy a home sooner rather than later.

Demand for homes hasn’t diminished as prices soared over the last year. In a typical year, we would expect that a 20% increase in home value would price many potential homebuyers out of the market, thereby causing a price correction. In this instance, we’ve found that to be half true. First-time homebuyers are usually the first to get priced out of the market. Over the past year, we are seeing fewer first-time buyers coming into the market. However, even though there may be fewer buyers in one category, there are plenty of buyers in other categories to make up for them.  In this case, we are seeing more investors coming into the market. Cash sales have jumped considerably, and homes are selling extremely quickly. As a result, it looks like prices will climb higher in the near future.


While the market remains competitive for buyers, conditions are making it an exceptional time for homeowners to sell. Low inventory means sellers will receive multiple offers with fewer concessions. Because sellers are often selling one home and buying another, it’s essential that sellers work with the right agent to ensure the transition goes smoothly.


August Housing Market Updates for selected Los Angeles areas

In this newsletter, we break down three luxury areas in Los Angeles as follows:

During July 2021, the median single-family home price rose month-over-month in the South Bay, reaching an all-time high. The median home prices in North Beach and the West Side declined slightly. Year-over-year, single-family home prices increased across the selected Los Angeles areas.

Single-family home inventory grew much higher for North Beach and the West Side in 2020 relative to 2019, while the South Bay trended similarly to 2019 (a “normal” year) in 2020. The unusual spike in inventory was short-lived due to demand in the area. In the selected markets, inventory retracted as quickly as it increased and is now trending similarly to pre-pandemic levels. Since the start of 2021, more new listings have been coming to market, but these were met with increased sales. Demand in the area is significantly higher than last year, and we expect many of the new listings that come to market this summer to be absorbed quickly. The sustained low inventory will likely cause prices to appreciate throughout 2021.

Days on Market has declined substantially since the start of 2021. Homes are still selling relatively quickly for luxury markets. As we’ll see, the pace of sales has contributed to the low Months of Supply Inventory (MSI) over the past several months.

We can use Months of Supply Inventory (MSI) as a metric to judge whether the market favors buyers or sellers. The average MSI is three months in California, which indicates a balanced market. An MSI lower than three means that there are more buyers than sellers on the market (meaning it’s a sellers’ market), while a higher MSI means there are more sellers than buyers (meaning it’s a buyers’ market). In July 2021, the MSI remained below three in the South Bay, highlighting the demand in the area. North Beach and the West Side are more balanced with MSIs near three.

In summary, the high demand and low supply present in the selected Los Angeles areas have driven home prices up. Inventory will likely remain low this year with the sustained high demand in the area. Overall, the housing market has shown its value through the pandemic and remains one of the most valuable asset classes. The data show that housing has remained consistently strong throughout this period. 

We expect that the number of new listings will continue to increase in the remaining summer months. The current market conditions, however, can withstand a high number of new listings coming to market, and more sellers may also enter the market to capitalize on the high buyer demand. As we navigate the summer season, we expect the high demand to continue, and new houses on the market to sell quickly.

As always, we remain committed to helping our clients achieve their current and future real estate goals. Our team of experienced professionals are happy to discuss the information we’ve shared in this newsletter. We welcome you to contact us with any questions about the current market or to request an evaluation of your home or condo.

Subscribe To Our Newsletter Here

Our team is committed to continuing to serve all your real estate needs while incorporating safety protocol to protect all of our loved ones.

In addition, as your local real estate experts, we feel it’s our duty to give you, our valued client, all the information you need to better understand our local real estate market. Whether you’re buying or selling, we want to make sure you have the best, most pertinent information, so we’ve put together this monthly analysis breaking down specifics about the market.

As we all navigate this together, please don’t hesitate to reach out to us with any questions or concerns. We’re here to support you.

– Vivian Yoon & Dennis Hsii , DRE #01925833 / DRE #01919746


See Your Home’s Value


Welcome to our September newsletter, where we’ll discuss residential real estate trends in the North Beach, West Side, and South Bay markets in Los Angeles and across the nation. This month, we’ll examine the state of the U.S. housing market now that more supply has come to the market and explore the impact of iBuyers and fin-tech companies’ influences on the housing market. 

From 2012 through 2019, the seasonality of the housing market was incredibly stable. For seven years, we consistently saw fewer sales in the winter months and higher sales in the spring and summer months. In 2020, however, we saw a shift. The usual seasonality gave way to super-high demand that remained consistent throughout the year, even after the initial pandemic shock from April to June 2020 faded. Then, in winter 2020 and early spring 2021, inventory decreased to historically low levels. Now we are far enough into summer to comfortably see pre-2020 seasonal trends return. 

Demand for homes has remained quite high, which has increased the use of all-cash offers that often serve as differentiators for sellers who receive multiple offers. The National Association of Realtors (NAR) reports that cash sales rose from 16% to 23% year-over-year in July. The increase in cash offers often pushes out first-time homebuyers who don’t have hundreds of thousands (or millions) of dollars on hand. At the same time, we are seeing fin-tech iBuyers (algorithmic instant cash buyers), which is still in its infancy, targeting first-time buyers as a means to stay competitive by making them all-cash buyers. This dynamic could drive demand even higher if fewer buyers are priced out of the market.

As we navigate this period of high buyer demand and low supply, we remain committed to providing you with the most current market information so you feel supported and informed in your buying and selling decisions. In this month’s newsletter, we cover the following:


Key Topics and Trends in September

Housing inventory started falling steadily in April 2020 in response to the pandemic, and the steady seasonal norms in supply vanished completely. As you can see from the chart below, we are starting to see a hint of seasonality return with the inventory increase over the summer months, albeit at a much lower level. As inventory crossed below the 600,000 level, sales began to slow; there simply weren’t enough homes to meet buyer demand, which created a hyper-competitive market for buyers. We are pleased to see inventory increase to alleviate some of the extreme demand.

The chart below, which illustrates sales over the last 12 months, reveals that sales often trend with inventory, but with a one-month lag. In other words, more sales are recorded when more inventory comes online during the previous month. For most of 2021, even though we were on pace to have a record number of home sales, the rate of sales was slowing. That deceleration, however, has reversed as more homes have come to the market.

The last year has taught us that uncertainty around the pandemic has positively correlated to home sales. People are spending more time at home, and the Federal Reserve is expected to keep mortgage rates low. As shown in the chart below, we’re currently hovering at historically low mortgage rates, which will likely remain for the rest of the year. Low-rate financing incentivizes buying, which has been one reason for the high demand over the last 18 months.

The housing market’s competitiveness has increased the number of all-cash purchases to the highest level we’ve seen in the last 10 years. In July 2021, NAR reported that 23% of home sales were cash purchases, which marks a 7% increase from 2020. The competitive nature of the current market has priced out many first-time homebuyers, but we could see that shift with the emergence of iBuyers, who can quickly purchase a home in cash. The speed with which buyers need to secure financing is often part of the problem for first-time buyers. iBuyers can offer the speed and financing necessary for a competitive offer. 

With such low supply and high demand for homes, we could see the market become even more competitive if fewer buyers are priced out of the market. Currently, a low percentage of sales involve iBuyers; however, if iBuyers become more common, supply could trend even lower than it already is.

While the market remains competitive for buyers, conditions are making it an exceptional time for homeowners to sell. Lower inventory means sellers will receive multiple offers with fewer concessions. Because sellers are often selling one home and buying another, it’s essential that sellers work with the right agent to ensure that the transition goes smoothly.


September Housing Market Updates for selected Los Angeles areas

In this newsletter, we break down three luxury areas in Los Angeles as follows:

During August 2021, the median single-family home price fell month-over-month in the South Bay, dropping from the all-time high in July. The median home price in North Beach rose, while the West Side declined slightly. Year-over-year, single-family home prices increased in North Beach and the West Side.

Single-family home inventory grew much higher for North Beach and the West Side in 2020 relative to 2019, while the South Bay trended similarly to 2019 (a “normal” year) in 2020. The unusual spike in inventory was short-lived due to demand in the area. In the selected markets, inventory retracted as quickly as it increased and is now trending lower than pre-pandemic levels. Since the start of 2021, more new listings have been coming to market, but these were met with increased sales. Demand in the area is significantly higher than last year, and we expect many of the new listings that come to market this fall to be absorbed quickly. The sustained low inventory will likely cause prices to appreciate throughout 2021.

Days on Market has risen recently. However, homes are still selling relatively quickly for luxury markets. As we’ll see, the pace of sales has contributed to the low Months of Supply Inventory (MSI) over the past several months.

We can use MSI as a metric to judge whether the market favors buyers or sellers. The average MSI is three months in California, which indicates a balanced market. An MSI lower than three means that there are more buyers than sellers on the market (that is, it’s a sellers’ market), while a higher MSI means there are more sellers than buyers (that is, it’s a buyers’ market). In August 2021, the MSI fell to one month of supply in the South Bay, highlighting the demand in the area. North Beach and the West Side are more balanced with MSIs near three.

In summary, the high demand and low supply in the selected Los Angeles areas have driven home prices up over the last year, but the huge price appreciation is slowing. Inventory will likely remain historically low this year with the sustained high demand in the area. Overall, the housing market has shown its value through the pandemic and remains one of the most valuable asset classes. The data show that housing has remained consistently strong throughout this period. 

We expect the number of new listings will continue to increase in the remaining summer months. The current market conditions, however, can withstand more new listings, and potential sellers may also enter the market to capitalize on the high buyer demand. As we navigate the summer season, we expect the high demand to continue, and new houses on the market to sell quickly.

As always, we remain committed to helping our clients achieve their current and future real estate goals. Our team of experienced professionals are happy to discuss the information we’ve shared in this newsletter. We welcome you to contact us with any questions about the current market or to request an evaluation of your home.

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