SoCal home values hit new record, but price rises are slowing
As fall is now officially upon us and winter is right around the corner, we wanted to bring you a Southern California real estate update. Home prices set another record last month, but the market is cooling despite the all-time price high.
The region’s six-county median sales price — the point at which half the homes sold for more and half for less — climbed 1.3% from August to $688,500 in September, according to data released Wednesday from real estate firm DQNews.
Although that’s a record number and up 12.9% from a year earlier, the annual price appreciation was the smallest since January. The number of homes sold was essentially flat, rising just 0.6% from September 2020.
People were buying homes sight unseen during the height of the pandemic. Now, people are at least seeing the homes in person for the most part.
The white-hot market of spring and early summer stemmed from rock-bottom mortgage rates and a desire for more space during the pandemic, as well as millennials who are increasingly looking to buy their first homes.
But lately, some buyers have put off their home searches, burnt out after constantly ending up on the losing end of bidding wars, according to agents. Economists have also been anticipating lower price appreciation, because incomes haven’t risen enough to continue to support price increases at the 20% levels seen earlier this year.
“People are hitting the affordability threshold,” said Richard Green, director of the USC Lusk Center for Real Estate.
In some corners of the Southland, sales fell compared with a year earlier, though prices rose in all counties.
- In Los Angeles County, the median home price rose 12% to tie a record of $795,000, while sales climbed 6.2%.
- In Orange County, the median home prices rose 13.4% to $890,000, while sales fell 7.8%.
- In Riverside County, the median home price rose 18% to a record $527,000, while sales rose 3.2%.
- In San Bernardino County, the median home price rose 16.8% to $463,000, while sales rose 1.5%.
- In San Diego County, the median home price rose 13.8% to $740,000, while sales fell 3.9%.
- In Ventura County, the median home price rose 9% to $725,000, while sales fell 2.3%.
Although home prices are at an all-time high, in some ways homes are more affordable to a larger group of people than during the bubble years preceding the Great Recession. That’s because mortgage rates have plunged to historic lows, and incomes have risen as well.
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