3 Reasons Why We’re Not Headed for a Housing Crash in Los Angeles and Beverly Hills, CA |

3 Reasons Why We’re Not Headed for a Housing Crash in Los Angeles and Beverly Hills, CA | Christophe Choo at Coldwell Banker Global Luxury is Your Local Real Estate Expert

Inventory of Homes for Sale Still Below Norm

• Months’ Supply of Existing Homes
  • Despite the growing supply of existing (previously owned) homes, it remains low. In Los Angeles and Beverly Hills, the demand for luxury properties continues to outpace supply, maintaining a competitive market.
  • Average inventory levels in these prime areas reflect a healthy market, with homes often receiving multiple offers, especially in high-demand neighborhoods.

Builders Aren’t Overbuilding, They’re Catching Up

• Single-Family Housing Units Completed, in Thousands
  • Builders in Los Angeles and Beverly Hills are not overbuilding like in the lead-up to the last housing crash. Instead, they are catching up after underbuilding for over a decade.
  • Luxury home construction in these areas focuses on quality over quantity, catering to the specific needs of affluent buyers looking for custom-built, high-end properties.

Foreclosure Filings Are Still Very Low

• Quarterly Number of Consumers with New Foreclosure Filings, in Thousands
  • During the crash, foreclosures spiked as many people couldn’t repay their loans. Today, filings remain very low. This trend holds true in Los Angeles and Beverly Hills, where the financial stability of homeowners and stringent lending standards contribute to the low foreclosure rates.
  • The high-value properties in these markets attract buyers with significant financial resources, further minimizing foreclosure risks.

Quote from Lawrence Yun, Chief Economist, NAR:

"We will not have a repeat of the 2008-2012 housing market crash. There are no risky subprime mortgages that could implode, nor the combination of a massive oversupply and overproduction of homes."

In Los Angeles and Beverly Hills, the market remains robust due to the enduring demand for luxury real estate, coupled with careful lending practices and limited overbuilding. These factors collectively ensure the stability and continued desirability of these prime real estate markets.

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