The housing market in Southern California is experiencing a notable shift. Recent statistics indicate a slight decline in home prices, yet they remain remarkably close to historical highs. As of September 2023, the average home price in the region stands at $868,919, reflecting a 0.3% decrease from August. This fluctuation underscores the dynamic nature of the real estate market, which often sees seasonal variations in pricing, particularly as summer transitions into fall.
Despite the recent dip, home prices have increased nearly 5% compared to the same time last year. This growth, coupled with the current economic climate, raises questions about the sustainability of these price levels. As economists closely monitor the interplay between home prices and income levels, it is essential to consider the factors influencing these trends, including supply constraints and shifting buyer priorities.
As we delve further into the details of the housing market in Los Angeles, we will explore the broader implications of these changes. From understanding the impact of rising mortgage rates to analyzing regional price differences, this article aims to provide clarity on what prospective buyers and renters can expect in the coming months.
What You Will Learn
- Current average home prices in Southern California and their trends.
- The factors affecting home prices, including seasonal fluctuations.
- Insights into rental prices and market dynamics in Los Angeles County.
- Expert opinions on future price movements and market stability.
Explore the latest prices for homes and rentals in and around Los Angeles.
Southern California home prices dipped in September, but remain just below their all-time high.
The average home price in the six-county region was $868,919 last month, down 0.3% from August and 0.7% below the record reached in July, according to data from Zillow.
September marks the second straight month prices slipped, but that does not mean home prices are going to keep falling. It’s not uncommon for home prices to fluctuate month to month, or dip starting in the late summer due to seasonal patterns. Home prices are still nearly 5% higher than a year earlier in September 2023.
That said, the rate of home price growth is slowing, something many economists expected to happen given the mismatch between incomes and prices.
Home price growth peaked at nearly 9.5% in April and has declined every month since.
Helping to moderate price growth is a housing shortage that, while not going away, is getting slightly less severe.
In recent months, the number of homes listed for sale has steadily grown. Real estate agents say homeowners who once balked at giving up their ultralow mortgage rates from the pandemic and prior are increasingly choosing to move, deciding a larger home is more important than low borrowing costs.
In September, the number of homes on the market had risen in all six counties over the prior year, ranging from a 25% gain in San Bernardino County to 49% in San Diego County. In Los Angeles County, inventory climbed 34%.
Mortgage interest rates have also come off their recent highs. As of Oct. 17, the average on a 30-year fixed loan was 6.44%, up somewhat from recent weeks, but below the 7% range seen in May, according to Freddie Mac.
The drop from spring immediately makes homes more affordable, but rates are still more than double what they were during much of the pandemic. Home prices are much higher as well.
Some experts don’t expect home prices to decline in the near future unless there’s a recession. That’s because while inventory is improving, it’s still low historically. Prices, however, should climb more slowly, or remain relatively flat, giving incomes a chance to catch up.
Use the tables below to search for home sale prices and apartment rental prices by city, neighborhood, and county.
