Southern California’s housing market cooled in late summer, with the slowest August on record and the smallest annual price gain in nearly a year.
But prospects for rebounding transactions appear likely with the pace of deal-making shifting upward in recent months, economists said.
The median price of a Southern California home — or the price at the midpoint of all sales — dipped to $760,000 in August, down $20,000 from the revised July average of $780,000 (a record), real estate data firm CoreLogic reported Monday, Oct. 7.
August’s median still was up 3% from August 2023 levels.
Sales in the six-county region, meanwhile, fell to 15,209 transactions, down 3% both from July and year over year, CoreLogic reported.
The year as a whole is shaping up to be one of the slowest on record as well.
Fewer than 119,000 households changed hands during the first eight months of the year, making 2024 the second-slowest year in records dating back to 1988.
August home sales were also down across the country, but “pending sales” — or signed deals still in escrow — have been up in recent months.
“Housing demand has been slowly improving in the past few weeks,” said California Association of Realtors Chief Economist Jordan Levine. “If mortgage rates remain at their current low or dip further in the coming weeks, home sales should rise steadily as we move toward the end of the year.”
Over the past two years, high interest rates discouraged both buyers and sellers.
High home prices coupled with high interest rates reduced buyers’ purchasing power. At the same time, sellers have been reluctant to give up bargain-basement mortgage rates obtained before the Federal Reserve started raising borrowing costs in the winter of 2022 to control inflation. Eight out of 10 California borrowers were paying 5% or less as of last spring, according to John Burns Research and Consulting.
Still, the market is shifting. Mortgage rates have fallen by 1.6 percentage points in the last year. And homes are taking longer to sell, causing the number of listings to grow.
The rate for a 30-year mortgage averaged 6.5% in August, Freddie Mac numbers show. A monthly payment for a median-priced Southern California home averaged $3,800 in August, down $246 a month from July.
According to Redfin, Southern California homes for sale are averaging one week longer on the market before going under contract; and 41% of homes sold for more than their asking price in August, compared with 49% a year earlier.
As a result, the number of Southern California homes for sale inched up steadily since the start of the year, bringing active listings to 53,725 in August, Redfin numbers show. That’s 24% more listings than in August 2023.
“The rise in inventory… implies homebuyers are in a much-improved position to find the right home and at more favorable prices,” Lawrence Yun, chief economist for the National Association of Realtors, said last month.
CoreLogic figures show San Bernardino and Orange counties had the biggest sales drops among local markets in August, while Orange and Los Angeles counties had the biggest price gains.
Here’s a county-by-county breakdown of median prices and sales totals, with percentage changes:
— Los Angeles County: $875,000, down 2.2% from July but up 4.8% year over year. Sales: 4,921 transactions, down 0.3% from July and 2.2% year over year.
— Orange County: $1.175 million, down 1% from July but up 8.8% year over year. Sales: 2,047 transactions, down 11.7% from July and 8.2% year over year.
— Riverside County: $577,000, down 2% from July but up 3% year over year. Sales: 3,084 transactions, down 0.7% from July but up[: comment=”(CQ)” ] 5% year over year.
— San Bernardino County: $510,000, up 0.2% from July and 3% year over year. Sales: 2,019 transactions, down 2.7% from July and 8.6% year over year.
— San Diego County: $875,000, down 1.7% from July but up 4.2% year over year. Sales: 2,564 transactions, down 3.7% from July and 2% year over year.
— Ventura County: $858,500, up 0.4% from July and 4.7% year over year. Sales: 574 transactions, down 0.2% from July and 5.3% year over year.
— SCNG business columnist Jonathan Lansner contributed to this report.
