If you are selling your home, high rates mean you will have fewer people touring your open houses than during the pandemic boom and you may need to rethink what your home is worth.

However, there are buyers out there at today's higher rates and some houses still receive bidding wars. Wealthy buyers can easier stomach a mortgage rate around 7% and may be able to pay all cash.

"I wouldn't call it a hot market," said Tracy Do, a real estate agent who specializes in Northeast L.A. "It's very tempered."

Homes for sale

If you are looking for a home, you may wonder where they've all gone. However, the experience might be somewhat easier than it's been.

For the first time since 2021, new listings in January — homes hitting the market for the first time — were up compared with a year earlier in L.A. County, according to Zillow. Similar trends were seen across Southern California.

Inventory has been extremely tight because many homeowners have decided not to sell, unwilling or unable to give up their 3% and below mortgages.

Orphe Divounguy, a senior economist with Zillow, said he believes that "lock-in" effect is starting to wear off, as more people decide they'd rather get on with their lives and move than keep a low mortgage rate.

But Divounguy and other economists don't expect a return to normalcy soon, given the depths of the inventory crisis. In part that's because of the difficulty of building houses in places like California, but also because high mortgage rates will still prohibit some from selling.

According to Zillow, there were a total of 10,887 homes on the market in January in L.A. County, both new listings and homes that remain on the market unsold. That was 13% below a year earlier, but an improvement from the 26% annual decline recorded in September.

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