Monday Morning Quarterback

Homebuyers Pullback in the Los Angeles Housing Market. This week’s quarterback focuses on the Los Angeles County market. As of May 2025, the Los Angeles housing market is showing signs of cooling off, with sales and prices experiencing slight pullbacks. However, it's not all doom and gloom, and there are opportunities for both buyers and sellers if you understand the current dynamics. While the market is down 7.9% YOY, the median listing price of homes in Los Angeles was $975K in May 2025, trending up 2.6% year-over-year. First, let's zoom out and look at the broader California context. According to the California Association of Realtors (C.A.R.), the state's housing market is facing some headwinds. In May 2025, existing single-family home sales totaled 254,190 on a seasonally adjusted annualized rate. That's down 5.1% from April and down 4% from May 2024. The statewide median home price also dipped to $900,170, a 1.1% decrease from April and a 0.9% decrease from May 2024. Several factors are contributing to this slowdown:

· Lingering Economic Uncertainty: People are still cautious about our economy.

· Elevated Mortgage Interest Rates: Although interest rates have averaged around 6.82% in May 2025 (down from 7.06% in May 2024), concerns about the economy still linger and prevent people from considering taking loans.

· Insurance Availability/Affordability: This is a big one, especially in areas prone to wildfires. The high cost (or lack) of home insurance can scare buyers away. California Fair Plan gives homeowners nightmares.

· Median Home Price: In May 2025, the median price of an existing single-family home in Los Angeles County was $835,480. This is a decrease of 1.7% from $850,270 in April 2025.

· Los Angeles Metro Area The median price of an existing single-family home was $855,000 This is a increase of 0.6% from $850,000 in April 2025, and increase of 1.8% compared to $840,000 in May 2024.

· Sales: Home sales in Los Angeles County decreased by 7.9% compared to May 2024.

· Unsold Inventory Index (UII): The UII for Los Angeles County was 3.9 months in May 2025, up from 2.7 months in May 2024. This means it will take longer to sell all the homes currently on the market.

· Days on Market: The median time it took to sell a home in Los Angeles County was 23 days in May 2025, up from 18.5 days in May 2024.

So, what does all this mean for investors? Quite simply, it's taking longer to sell homes, and while prices are still up year-over-year, they've softened a bit compared to the previous month. LA appears to be aligning to the broader direction of the wider Californian market.

When FEMA Failed To Test Soil For Toxic Substances After The LA Fires, The LA Times Had It Done. On the heels of the Eaton and Palisades fires (among the most destructive urban wildfires in U.S. history), federal and state disaster agencies have refused to pay for soil testing to ensure fire-related contamination no longer remains in thousands of now-empty dirt lots across Los Angeles County. Without this long-established precautionary measure, tens of thousands of wildfire survivors are poised to rebuild and eventually return home, not knowing if unhealthy levels of heavy metals are hidden in the soil on their properties. That leaves homeowners with a daunting choice: Pay for testing and potentially for additional soil removal themselves, or live with the possibility of lingering contamination. How concerned should homeowners be? The Los Angeles Times set out to answer that question by launching its own soil-testing initiative, modeled after the state’s sampling methodology used in previous wildfires. Their journalists fanned out across Altadena and Pacific Palisades to obtain soil samples from 20 properties cleared by federal cleanup crews and 20 homes that survived; the samples were transported to a state-certified laboratory where they were tested for 17 toxic metals. Shockingly two of the 10 Army Corps-remediated homesites in Altadena still had toxic heavy metals in excess of California standards for residential properties — including one where lead levels were more than three times higher than the state benchmark. The findings are the first evidence that (by skipping comprehensive soil sampling) federal contractors are leaving toxic contamination behind. Testing also revealed elevated levels of arsenic, lead and mercury in the yards of three homes that survived the Eaton fire (although these homeowners did not have the benefit of a federal cleanup. These results (along with historical data from previous fires) suggest that there could be more than a thousand ostensibly remediated properties still containing toxic substances in the regions ravaged by the fires in January.

Price-Gouging Charges Filed Against Landlord. California Attorney General Rob Bonta last week announced charges against a real estate agent accused of raising rent on a Beverly Hills property by 30% in violation of state law prohibiting price-gouging after a disaster. The tenants who signed the lease were displaced because of the deadly Palisades Fire, which ignited in January. Iman Eshaghyan faces two misdemeanor counts for allegedly advertising, listing and eventually renting two properties at a cost that exceeds the limit. If convicted, the maximum penalty is a $10,000 fine and up to a year in jail, prosecutors said. Bonta said in a statement that he and his office would not stand for price-gouging in the wake of the fires. “I urge current or prospective tenants to share their stories directly with local authorities like the L.A. City Attorney or L.A. District Attorney,” he said. Eshaghyan declined to comment on the charges. He told reporters he would have his attorney reach out instead. According to his LinkedIn profile, Eshaghyan is listed as being in the top 1% of sales associates at Coldwell Banker Commercial, a popular real estate franchise. After the devastating January fires in Southern California, Gov. Gavin Newsom issued an emergency declaration. State law prohibits rent increases of more than 10% on rental properties in the wake of an emergency or disaster. Residents affected by the fires were thrust into a rental market that already struggled to meet the demand for affordable housing. These aren’t the first price gouging charges the state attorney general has announced so far this year. Bonta filed charges against three real estate agents in January and February. Those agents have denied the charges. L.A. City Attorney Hydee Feldstein Soto in February also announced misdemeanor price gouging charges against a homeowner and real estate agent who allegedly engaged in price gouging. They, too, deny the charges. All of these lawsuits are still pending.

In Areas Near January’s Fires, Rent Is Climbing Faster Than The Rest Of County. Six months after fires tore through Pacific Palisades and Altadena, rent near burn areas is rising faster than elsewhere in Los Angeles County, according to an L.A. Times analysis of Zillow data. For example, in ZIP codes within three miles of the Palisades fire, rent increased 4.8% from December to April, according to the analysis. Within three miles of the Eaton fire that destroyed swaths of Altadena, rent jumped 5.2%. In L.A. County ZIP codes farther than three miles of either burn area, the gain was smaller — 2.2%. Rent could be rising for multiple reasons, experts say, but it’s likely climbing faster near the fires because thousands of homes were destroyed and displaced residents wanted to stay near where they had built their lives, in the process creating a surge of demand in an already drum-tight housing market. “It doesn’t surprise me,” said Nicole Lambrou, an urban planning professor at Cal Poly Pomona. “You’re looking close to where you were because that’s your community.” In the weeks after flames broke out, there were widespread reports of landlords illegally price gouging, even raising rent beyond 50%. But there’s been debate over how widespread and long-term the fire effects would be, leading to different responses from different government bodies. The Los Angeles County Board of Supervisors in February passed eviction protections for many tenants economically affected by the fires, but the Los Angeles City Council declined to take similar measures amid concerns they would hurt landlords. The Federal Emergency Management Agency hasn’t leased apartments for displaced residents like it has after similar disasters, saying data indicate there is enough housing available. To conduct its analysis, the Los Angeles Times looked at Zillow rent data at the ZIP code level for single family houses, condos and apartments and compared average rent from December (the month before the fires) to April.

Santa Monica “Taps” Into Law For Third Street Promenade. The city of Santa Monica is hoping to pump some life back into the Third Street Promenade by enlisting the help of an age-old attraction: booze! Thanks to state Senate Bill 969, Santa Monica was able to designate the Promenade as an “entertainment zone,” meaning residents, tourists and the like can walk freely outdoors while enjoying an alcoholic beverage purchased from a participating business within the retail district (visualize Bourbon Street in New Orleans). The new ordinance is the latest effort by the city to revitalize the three-block stretch of the Promenade after nearly a decade of ongoing struggles, including a steady decline in tourism, ever-changing consumer spending habits and the overall operational structure of the retail district before and after the Covid-19 pandemic. The entertainment zone, which went into effect June 13, will operate only Fridays through Sundays from 11 a.m. to 10 p.m. – though the city has the option to expand the timeframe in general or for special events. It will stretch across the 1200 and 1400 blocks of the Promenade between Wilshire Boulevard and Broadway. The aim is to increase foot traffic and attract new businesses as the Promenade continues its efforts to recover from the pandemic which served as a huge blow for the strip, says Ryan Hawley, vice president of retail brokerage at Jones Lang Lasalle, Los Angeles. “(The pandemic) certainly put the death knell on the Third Street Promenade, but its downtick had started well before (the pandemic),” Hawley says, adding that the Promenade peaked in 2016. This is reinforced by a nearly 18% decrease in the Promenade’s overall occupancy from 2017 to now. Catered more toward tourists than locals, the shops along the Promenade truly struggled at the hands of decreased tourism amid the pandemic, Hawley says. The city stressed that if safety issues arise, the program can always be terminated. Hawley also pointed out the city’s rules including that drinks must be purchased from businesses within the Promenade and that participants will wear wristbands indicating they are over 21 as measures to protect things from getting out of hand. “This is not an open container, free for all… The aim is to create a cohesive, collaborative environment,” Hawley said.

Pope Leo’s Hometown Approves The Purchase Of His Childhood Home. Pope Leo XIV’s hometown is poised to buy his childhood home after the south Chicago suburb’s board voted unanimously Tuesday to purchase the property, hoping it will breathe new life into a village saddled with financial woes. Since white smoke billowed in May from the Sistine Chapel and Pope Leo XIV was elected Pope Francis’ successor, the new pope’s childhood home — a small, two-story house in Dolton, Ill., about 20 miles south of Chicago — has drawn visitors from across the country with many treating it as a pilgrimage site. Cardinal Robert Prevost made history by becoming the first pope from the United States — a stunning decision that Chicagoans celebrated by flocking to churches and sharing memes. Prevost was born in 1955 in the South Side Chicago neighborhood of Bronzeville and grew up in suburban Dolton, near St. Mary of the Assumption, where he attended Mass and elementary school. He later studied theology at the Catholic Theological Union of Chicago in the Hyde Park neighborhood and taught in local Catholic schools, including at St. Rita High School. Dolton Mayor Jason House called purchasing the pope’s childhood home a “once-in-a-lifetime opportunity” during a Tuesday meeting of the Dolton Village Board. The childhood homes of other popes have often been turned into museums or pilgrimage sites. “This is a proud moment for our village and an opportunity, and we want to make sure that we’re doing it justice,” he says. The home has an estimated value of approximately $140,000.00. “Dolton has been through a lot in the last few years, so this is such a great, positive moment for Dolton,” Mayor House declares. “The community seems pretty excited.”

“An Evening with Jennifer Greene.” On Thursday night, July 10, 2025, we will have the honor to host the renown real estate investor, Jennifer Greene. Jennifer has developed a unique approach to real estate investing by creating strong value-added relationships with referral partners across several professions. Jennifer is a marketing wiz and turns the real estate market upside down. Don’t miss her presentation! Thursday, July 10th, 6:30 to 9:30 pm. Iman Cultural Center, 3376 Motor Avenue (between National and Palms), Culver City CA. FREE Admission. Please RSVP at our website, LARealEstateInvestors.com.

Vendors Expo Returns! Our world-famous "Vendors Expo" returns in 2025, on Thursday night, July 10, 2025. The Vendor Expo opens starting at 6:30 pm. We'll have 30+ of the finest vendors featuring real estate products and services you will want to utilize as a successful investor. Our Vendor Expo will be held at the Iman Cultural Center, 3376 Motor Avenue (between National and Palms), Culver City CA. FREE Admission. Please RSVP at our website, LARealEstateInvestors.com.

This Week. Investors will continue looking for additional information about tariff policies and monitor the situation in the Middle East. It will be an extremely light week for economic reports as people recover from the July 4th holiday. The detailed minutes from the June 18 Fed meeting will come out on Wednesday. Jobless Claims will be released on Thursday.

Weekly Changes:

10-Year Treasuries: Rose 005 bps

Dow Jones Average: Rose 900 points

NASDAQ: Rose 300 points

Calendar:

Wednesday (7/9): Fed Minutes

Wednesday (7/9): MBA Purchase

Thursday (7/10): Jobless Claims

For further information, comments, and questions:

Lloyd Segal

President

Los Angeles County Real Estate Investors Association

Lloyd@LARealEstateInvestors.com

310-792-6404