SoCal's real estate market catching fire

SoCal’s hot real estate market

Southern California home prices reached an all-time high in February. Experts say low mortgage rates and people's desire to own more space is driving a pandemic housing boom.

This charming 2-bedroom, one-bath home in El Sereno is listed for $750,000. It's currently in escrow for way above the asking price, as realtors say they got an astounding 48 offers.

"South Pasadena, Highland Park, El Sereno, the east side of LA, which is a very hot area right now," said realtor Leslie Rubin.

The market is so hot that in February, Southern California home prices jumped 15% to an all-time high. Great news for sellers, but not so much for buyers.

First-time buyers like Sarah Molina and Sterling August are seeing the challenges of a scorching market.

"I do get discouraged," Sarah said. "I feel like right now is a hard time to get in."

The couple has been renting in La Crescenta. Molina, a teacher with LAUSD, said she's been saving for a down payment for about six years.

"We have about 100k and we’re hoping not to have to use all of it for a down payment," she said.

According to a study by Point2 Homes, millennials like Sarah would take an average of 12.2 years to save for a 20% down payment of $141,000 to be able to afford a median home in Los Angeles of $708,000.

For Gen Zs, the situation is even more challenging. According to the study, it will take 23 years to come up with the down payment based on a $35,000 annual salary.

Realtors say, some buyers can't save enough on their own.

"There are a lot of buyers out there who are lucky enough to have parents who are gifting them funds," said Keely Myers, a realtor with Compass.

While Sarah and Sterling have just started putting their offers in, first-time buyer Masiba Mukimoba has been submitting offers for the past eight months and realized early on that she had to expand her search locations and her price.

"It went all the way to $1,000,000," Masiba said. "Although originally, my plan was to go to the 7s."

After submitting about 30 offers, we are happy to report that she is now in escrow with a 2-bedroom home in Woodland Hils with a pool

Experts say there are many factors driving price, including low inventory. Recent figures show nearly 50% fewer listing year over year, coupled with record low-interest rates and an abundance of buyers willing to pay in cash.

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