According to market reports Douglas Elliman and Miller Samuel Real Estate Appraisers & Consultants, sales fell by double-digit percentages by the fourth quarter in Los Angeles. The supply of unsold homes grew which caused the prices to fall.
Research from Redfin indicates that the supply of homes priced at $1 million or more rose 1 percent in the fourth quarter, while the amount of $5 million-plus homes on the market was up 15 percent.
Redfin’s chief economist Nela Richardson said that the 2016 election might have something to do with the slump.
“The Trump rally in the stock market did little to move prices in luxury real estate,” Richardson said. “Cities with booming luxury markets attracted traditional high-income buyers seeking a place to live, work and grow their families. Prices in cities with more transient luxury buyers, looking for investments or a place to park their wealth, had more tepid growth to close out 2016.”
Compared to the Hamptons and Aspen, Los Angeles was stronger. L.A. saw average sale prices up 10 percent. Yet with the number of sales fell to 12 percent. According to CNBC, “Performance was more mixed in the wealthy communities of Bel Air and Beverly Hills. Sales in Beverly Hills fell 33 percent, and average prices were flat. Meanwhile, sales and prices in Bel Air rose in the fourth quarter, with sales up 24 percent.”
Since the homes in Bel Air and Beverly Hills are in the millions, the numbers in each of these communities can be affected by just a few sales. The average sale price in Bel Air, where 36 sales were reported, is $7.2 million and jumped 68 percent due to a few big deals.