Pasadena, California, is a sought-after city located in Los Angeles County known for its rich history, cultural events, and beautiful architecture. The Pasadena housing market is currently in a seller's market with limited supply and high demand from buyers, which is driving up the prices. In this blog post, we will analyze the latest available data to provide an overview of Pasadena's housing market trends and forecasts for 2023.
Current Pasadena Housing Market Trends
As of January 2023, the median sale price of homes in Pasadena was $1.1M, which is a 2.2% decrease from last year. However, the average sale price per square foot was $704, which increased by 7.6% from the previous year. Homes in Pasadena sell, on average, after 49 days on the market, one day longer than last year. In January 2023, 61 homes were sold in Pasadena, a decrease from the 104 homes sold in January 2022.
According to Redfin, a residential real estate brokerage, the Pasadena housing market is somewhat competitive, with homes receiving an average of 5 offers. On average, homes sell for about 1% above the list price, and hot homes can sell for about 6% above the list price. In nearby cities, homes sell for about 3% below the list price, with hot homes selling for around the list price.
Migration and Relocation Trends
Six percent of homebuyers searched to move into Pasadena from outside metros, according to Redfin. San Francisco homebuyers searched to move into Pasadena more than any other metro, followed by Chicago and New York. The most popular destination among Pasadena homebuyers was Las Vegas, followed by San Diego and Phoenix.
Pasadena Home Values and Market Condition
According to Realtor.com, the median listing home price in Pasadena, CA was $1.1M, which remained unchanged from the previous year. The median home sold price was also $1.1M, which indicates that homes in Pasadena are selling at their listed prices. The sale-to-list price ratio for Pasadena, CA, is 100%, which means that homes are selling at the asking price on average. This indicates that there is a high demand for homes in Pasadena, and buyers are willing to pay the listed prices.
Pasadena, CA, is currently a seller's market, which means that there are more buyers than available homes for sale. This is due to the limited supply of homes and high demand from buyers, which is driving up the prices. The median days on market for homes in Pasadena, CA, was 66 days in January 2023, which is slightly higher than the previous month, and slightly up from the previous year. This indicates that homes are taking slightly longer to sell than in the past, but still within a reasonable timeframe.
Pasadena Housing Market Forecast
According to Zillow's Home Value Index (ZHVI), the typical home value in Pasadena is $1,059,066, which is up by 4.2% compared to last year. The median sale-to-list ratio is 99.9%, which means that homes in Pasadena are selling at a price close to their list price. The percentage of sales over the list price is 43.2%, which shows that there is some competition in the market. The median days to pending is 18, which indicates that homes in Pasadena are selling quickly.
Based on the latest forecast data provided, it appears that the Los Angeles metro area, which includes Pasadena, may experience a decline in home values in the coming months. According to the data, as of January 31, 2023, the metro area had already seen a decline of 1.3%. The data also projects further declines of 3.5% by April 30, 2023, and 3.3% by January 31, 2024.
This decline in home values could be attributed to several factors, including the higher interest rate environment, the ongoing COVID-19 pandemic, and potential changes in the job market. However, it's important to note that real estate markets are complex and can be influenced by many factors.
As such, it's difficult to predict with certainty how the housing market in Pasadena and the Los Angeles metro area will evolve. Nonetheless, the data suggests that homeowners and potential buyers should closely monitor the market in the coming months to stay informed about any changes that may impact their financial decisions.
The current housing market in Pasadena is facing some challenges due to the higher interest rate environment compared to twelve months back. The average 30-year fixed mortgage rate in the United States is around 6.94% (February 24, 2023), which is significantly higher than last year's historic low rates, which were below 3%. This rise in interest rates has made borrowing money more expensive, and as a result, it has affected the purchasing power of homebuyers.
As interest rates rise, the cost of borrowing money to purchase a home also increases, making homes less affordable for potential buyers. This has led to a slowdown in demand for homes, which has resulted in a decline in the number of home sales in the area. Additionally, the higher interest rates have also made refinancing less attractive, leading to a decrease in refinancing activity.
Despite the challenges posed by the higher interest rate environment, the Pasadena housing market remains strong due to the high demand for homes and the limited inventory available. Home prices are expected to continue to rise, but at a slower rate than in the previous year, and sellers are likely to have to adjust their expectations to reflect the changing market conditions.
Overall, the Pasadena housing market is facing some headwinds due to the higher interest rate environment, but it remains a seller's market, and the limited inventory of homes for sale is likely to continue to drive up prices. Homebuyers may need to adjust their expectations and consider more affordable neighborhoods or smaller homes to stay within their budget in this changing market.
Pasadena Real Estate Investing Overview
Pasadena is a vibrant and affluent city located in Los Angeles County, California. Its proximity to Los Angeles, beautiful architecture, and scenic landscapes make it an attractive location for real estate investors. Here's an overview of the Pasadena real estate market and investment opportunities for interested investors:
Market Overview:
- The median home value in Pasadena is $1,059,066, and it has been steadily increasing over the past few years.
- The median rent price in Pasadena is $3,100, which makes it a good location for rental property investment.
- The housing market in Pasadena is competitive, with a high demand for homes and a low inventory.
- The city has a diverse economy with strong job growth, which is a good sign for real estate investors.
Investment Opportunities:
- Single-family homes are a popular investment option in Pasadena, especially for those interested in long-term rentals.
- Multi-family properties, such as duplexes, triplexes, and apartment buildings, offer investors the opportunity to generate income from multiple rental units.
- Condos and townhouses are also good options for investors, especially for those interested in short-term rentals or Airbnb-style rentals.
- Fix-and-flip properties can be profitable for investors who have the skills and resources to renovate homes and sell them for a profit.
Rental Property Investment in Pasadena:
- Investing in a rental property in Pasadena can provide a smart move for real estate investors.
- Rental property can be a profitable and rewarding investment strategy for real estate investors who are willing to do their due diligence and carefully manage their properties.
- Pasadena has a growing population and strong job market, leading to steady demand for rental properties.
- The high home prices in Pasadena can make it difficult for many people to afford to buy a home, driving up demand for rental properties.
- Investors can benefit from the potential for rental income to provide a steady stream of passive income.
- Rental property investments can offer tax benefits such as deductions for property expenses, depreciation, and mortgage interest.
- Factors such as location, property condition, rental rates, and local regulations should be considered when investing in a rental property in Pasadena.
- Working with a local real estate agent or property management company can be helpful in identifying desirable neighborhoods and properties, as well as navigating local regulations and rental market trends.
Considerations for Investors:
- Pasadena's real estate market is competitive, so investors need to act quickly to secure properties.
- Investors should be aware of the local zoning laws and regulations before making any investment decisions.
- It's important to work with a local real estate agent who has knowledge and experience in the Pasadena market.
- Financing options, such as traditional mortgages or hard money loans, should be considered based on the investment strategy and goals.
Hence, the Pasadena real estate market offers a variety of investment opportunities for investors looking to generate income through rental properties or by flipping homes. With a strong local economy, attractive location, and high demand for housing, Pasadena is a market worth considering for real estate investment.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
Sources:
- https://www.zillow.com/home-values/47019/pasadena-ca/
- https://www.redfin.com/city/14498/CA/Pasadena/housing-market
- https://www.realtor.com/realestateandhomes-search/Pasadena_CA/overview
