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 / 01919746


See Your Home’s Value


Welcome to our May newsletter, where we dive into national and local residential real estate trends. This month, we examine how the housing undersupply is increasing home prices and paving the way toward a more balanced market. We also discuss the sharp decrease in mortgage rates and the state of employment, which is historically one of the leading indicators of home valuations.

Currently, the housing supply is so low that demand far outpaces the number of homes on the market. Freddie Mac estimates that the United States is about 4 million homes short of meeting buyer demand. The housing shortage compounds when potential home sellers decide to stay out of the market because they feel they won’t be able to find a home to buy after they sell. Home builders, who have been slow to ramp up production after the 2008 crash, are drastically increasing new construction because they want to capitalize on the sustained demand for housing.

We expect relative housing demand to remain high over the next 12 months at the very least. New homes take time to build and will not come to market at the rate necessary to balance it. In March 2021, U.S. home builders started constructing homes at a seasonally adjusted annual rate of 1.74 million, up 37% compared to March 2020. New construction will eventually alleviate some of the shortage, but housing will remain undersupplied for months, if not years, to come. 

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 May

Last year, many individuals and families experienced feast or famine. Those lucky enough to stay financially unaffected by the pandemic were likely saving or investing more than expected, accruing more and more capital. At the same time, interest rates plummeted to hyperlow levels as millennials, the largest living adult generation, grew to prime homeownership age. With these factors combined, we saw the demand for homes skyrocket in 2020. The near-universal ability to work remotely changed motivations for moving. Relocating for a job or to be closer to the office was no longer necessary. However, due to the unique requirements of working from home, people began wanting more space. As a result, single-family home demand rose steeply, while condo demand lagged. As sellers listed condos, they bought single-family homes, driving single-family home inventory down. As the supply of homes declined, fewer new listings came to market—in part, because of the difficulty of finding a new home after selling.

One reason for the housing shortage has been the understandable hesitancy of builders to construct new properties since the 2006–2008 housing crash; however, this lack of new construction means that there aren’t enough homes on the market to meet the unexpectedly high demand. Over the last six months, new construction has ramped up considerably to an annualized 1.74 million new homes. The largest gains in new-home construction occurred in the Midwest, where housing starts more than doubled on a monthly basis. The Northeast and the South also saw faster rates of new-home construction, while home-building activity slowed in the West. Additionally, established metro areas lack land upon which to build, so adding meaningfully to supply through new construction can be challenging or fully unattainable.  

As you can see from the chart below, new construction is now in the pre-housing bubble levels as home builders react to the surge in home prices and demand.

New Housing Construction

Mortgage rates rose significantly, slightly over 50 basis points, from January 2021 to mid-April 2021, but dropped sharply back below 3% in the second half of April. Although interest rates are still expected to rise to 3.7% over the course of the year, according to the Mortgage Bankers Association, the mortgage rate drop shows the non-linear path that rates will likely take. Because the mortgage rate affects affordability, the current low rate will only increase demand in the short term.

30-Year fixed Interest Rate

High unemployment is one of the strongest predictors of falling home prices over a two-year period. The chart below illustrates the employment cost of a recession. Total employment tends to grow at a fairly consistent rate during economic expansions. The green line illustrates the expected level of employment had the pandemic never happened. As that green line shows, we are nearly 11 million jobs below where employment was expected to be after the first quarter of 2021. Twice as many workers are currently unemployed than in February 2020. The initial pain of unemployment has been dampened by government relief. Mortgages in forbearance and foreclosures are low, as are delinquencies in credit card debt. However, we will continue to monitor unemployment in order to gauge future market conditions.

Employment Level in the United States

Although we don’t expect the same level of buying in 2021 that we saw in 2020, the environment is right for demand to outpace supply in 2021. In the short term, we may even see a demand spike as potential buyers try to purchase before rates rise higher. As a result, we anticipate a competitive landscape for buyers over the course of this year. 

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

May Housing Market Updates for selected
Los Angeles areas

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

During April 2021, the median single-family home price rose in the three selected areas month-over-month. The West Side median home price rose to its highest level in two years. Year-over-year, single-family home prices increased across markets as well.

Select Los Angeles Areas Median Home Prices
Select Los Angeles Areas Median Price Changes

Single-family home inventory grew much higher for North Beach and the West Side in 2020 relative to 2019, while 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 below last year’s levels in the West Side and the South Bay, while the North Bay is at last year’s 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 will likely absorb many of the new listings that come to market this spring. Ultimately, inventory is still low, and the sustained low inventory will likely cause prices to appreciate throughout 2021.

North Beach Inventory
West Side Inventory

Single-family homes in the North Beach and West Side areas spent more time on the market in April 2021 than they did last year. However, homes are still selling relatively quickly for luxury markets.

We can use MSI as a metric to judge whether the market favors buyers or sellers. The average MSI is three months in California (far lower than the national average of six months), which indicates a balanced market. An MSI lower than three means that there are more buyers than sellers on the market (that is, it is a sellers’ market), while a higher MSI means there are more sellers than buyers (that is, it is a buyers’ market). In April 2021, the MSI remained below three in the South Bay, highlighting the demand in the area. North Beach is balanced with 3.4 months of supply, and West Side MSI favors buyers with 4.1 months of supply.

In summary, the high demand and relatively low supply present in selected Los Angeles areas have driven home price appreciation. Inventory will likely remain low this year with fewer sellers coming to market, potentially lifting prices higher. Overall, the housing market has shown its resilience 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 anticipate new listings to accelerate into the summer months. The current market conditions could withstand a high number of new listings coming to market, and more sellers could enter the market to capitalize on the high buyer demand. As we enter the spring season, we expect the high demand to continue, and new houses on the market to be sold 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

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 / 01919746


See Your Homes Value


Welcome to our April newsletter. This month, we examine how the housing undersupply contributes to increasing home prices, as well as the market effects of the large increase in mortgage rates since January. 

Currently, the housing supply is so low that the demand far outpaces the number of homes on the market. The pandemic changed the direction of consumer spending from a focus on services to a focus on physical goods. It also accelerated the rate at which people built savings. With the addition of hyperlow mortgage rates, homebuying became more accessible to a higher number of people in 2020. 

We expect housing demand to remain high for many years. Even as offices become safer, we anticipate people will continue working remotely, even if only partially. Increased remote work changed housing priorities, contributing to the increased demand. Additionally, as COVID-19 cases continue to decline and vaccinations increase, our futures look more certain. This means that the period of all-time-low mortgage rates is ending, which may boost demand even further over the next several months as buyers try to lock in low fixed rates.

As we navigate an ever-changing economic landscape, 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 April

In order to understand the magnitude of price movements in 2020, we can look at the Case-Shiller 20-City Home Price Composite Index, the leading measure of residential real estate prices in major metro areas. As you can see from the chart below, we take a 20-year view of the housing market. This allows us to see the cumulative home price movement (purple line) and the rolling 12-month change. 

Home price composite

Until the late 1990s/early 2000s, homes acted as more of a store of value rather than a risk asset, in that home prices generally kept up with inflation. For instance, a home bought 30 years ago would be the same price today after adjusting for inflation pre-2000. In the early 2000s, home prices rallied due to loose lending standards/predatory lending, mismanagement of risk, and negligence of financial institutions, which led to the greatest recession since the Great Depression. 

Home prices took about six years (2006–2012) before they began to meaningfully recover, and the early stages of recovery (2012–2014) were the strongest until 2020. The last time home prices rose as sharply as 2020 was March 2006, which was the time home prices peaked prior to the 2008 financial crisis. To be clear, we aren’t comparing 2006 to 2020 in terms of risk. The housing bubble that occurred between 2004 and 2006 was largely caused by financial institutions. In 2020, homes appreciated because of market factors: a greater number of people saved more than expected, and mortgage rates fell to historic lows. This caused the supply to drop to the lowest level since the National Association of Realtors started recording inventory in 1999. 

Months of Supply Inventory (MSI) indicates how quickly all the current homes for sale would be absorbed if no new homes came to market. In more normal times, MSI usually stands at around five to six months in the United States, and three months in California. The chart below illustrates the precipitous drop in MSI starting after the early months of the pandemic. In the short term, home supply is fixed, so the spike in demand ate up the inventory.

Mortgage rates rose significantly, slightly over 50 basis points, since January 2021. This increase in mortgage rates equates to about a 6.5% rise in the monthly 30-year fixed mortgage cost. Usually, this would hamper demand—which it will—but supply is so low that it won’t matter much from the seller’s point of view. Sellers can still expect multiple offers on their listings. If rates rise another full percentage point, we could see a more dramatic drop in demand. 

Although we don’t expect the same level of buying in 2021 that we saw in 2020, the environment is right for demand to outpace supply in 2021. In the short term, we may even see a demand spike as potential buyers try to purchase before rates rise higher. As a result, we anticipate a competitive landscape for buyers over the course of this year. 

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

Usually, we write these updates to educate our community with current market conditions. As more real estate agents enter the market, however, we also feel it’s prudent to mention the real estate agent surplus that has manifested over the last 12 months. A career in real estate has relatively low barriers to entry; therefore, at a time when unemployment rates are high and the real estate market is hot, we are seeing a large increase in the number of real estate agents. According to the National Association of Realtors, the supply of homes for sale stands at a little over 1 million, while real estate agents number 1.4 million. There exists a clear imbalance here. Like many careers, wisdom gained through experience becomes invaluable. During this unique time, we encourage you to hire an agent who has successfully navigated market cycles and is, therefore, able to best advise you on your buying and selling strategies.


April Housing Market Updates for selected
Los Angeles areas

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

In March 2021, the median single-family home price rose in the West Side and South Bay and fell in North Beach month-over-month. Year-over-year, single-family home prices increased in North Beach and South Bay and remained flat in the West Side.

Single-family home inventory grew much higher for North Beach and the West Side in 2020 relative to 2019, while 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 below last year’s levels in the West Side and the South Bay. Demand in the area is significantly higher than last year and will likely absorb many of the new listings that come to market this spring. We expect prices to remain stable in the luxury markets due to the high demand. 

Single-family homes in the select Los Angeles areas spent more time on the market in March 2021 than they did last year. However, homes are still selling relatively quickly for luxury markets.

We can use MSI as a metric to judge whether the market favors buyers or sellers. The average MSI is three months in California (far lower than the national average of six months), which indicates a balanced market. An MSI lower than three means that buyers dominate the market, and there are relatively few sellers (i.e., it is a sellers’ market), while a higher MSI means there are more sellers than buyers (i.e., it is a buyers’ market). The MSI remains below three in the South Bay, highlighting the demand in the area. North Beach is balanced, as MSI fell to 3 months of supply, and West Side MSI favors buyers with 5 months of supply.

In summary, the high demand and relatively low supply present in selected Los Angeles areas have driven home price appreciation. Inventory will likely remain low this year with fewer sellers coming to market, potentially lifting prices higher. Overall, the housing market has shown its resilience 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 anticipate more new listings to come to market as we enter the spring/summer season and for demand to remain high. 

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 for our Newsletter Here

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