Southern California home prices clung to lofty heights through September despite slow sales, increased listings and high mortgage rates.
Transactions fell to one of the lowest levels on record. Yet prices ticked up from August to September, coming within $15,000 of the all-time high reached last summer.
Despite high prices, the lethargy of the past two years now appears to be impacting home sellers as well as buyers, with homes taking longer to sell and fewer selling for more than their asking price. And it’s sucking the life out of an industry dependent on sales volume for profits, including real estate agents, lenders, home inspectors and even retailers like furniture stores.
“2024 has been a very difficult year on many fronts,” Lawrence Yun, National Association of Realtors chief economist, said in a recent statement. “We didn’t get the home sales recovery this year after an awful 2023.”
See also: Real estate agents, industry providers grapple with slowest market in 35 years
The median price of a Southern California home – or the price at the midpoint of all sales – rose to $765,000 in September, up from August and up almost 6% from a year earlier, real estate data firm CoreLogic reported Friday, Nov. 8.
That brought the middle to a September record.
All six counties in the region posted year-over-year home price gains, ranging from 1% in Ventura County to almost 12% in Orange County, the region’s priciest home market. Prices were up 6% in San Diego County, 5% in Riverside County, 3% in San Bernardino County and almost 2% in Los Angeles County.
Home sales in the region, meanwhile, tumbled to 12,563 transactions in September, down 17% from August and down 6% from a sluggish September 2023 tally.
It was the 12th slowest month in CoreLogic records dating back to 1988. And it was the second-slowest month for a September.
The year as a whole is shaping up as the second-slowest as well, with 170,267 transactions closed through September. That’s fewer than in the first nine months of 2023.
See also: Typical homebuyer likely to be older, while share of first-time buyers shrinks
September’s market doldrums mirror patterns etched across the region for more than a year due to a lack of homes for sale and weakened buyer demand.
“High (mortgage) rates and fatigue from home price growth over the last year has impacted buyers,” CoreLogic Chief Economist Selma Hepp said in an email. A rate surge last spring and summer “affected consumer sentiment and considerably slowed homebuying demand.”
Twenty-year-high mortgage rates also discouraged homeowners with lower rates from selling and taking on a higher house payment elsewhere. At least 86% of US borrowers have a rate below the current weekly average of 6.8% and three-fourths have rates below 5%, according to Redfin, the online real estate brokerage.
But the so-called “lock-in effect” has started to ease as some homeowners give up low rates to be able to move, Redfin reported.
As a result, the number of Southern California homes for sale has been rising steadily throughout the year, climbing to more than 52,600 for-sale listings in the region in September, up from 35,700 last December.
Redfin figures show the average Southern California home took approximately nine days longer to sell in September than a year earlier. The number of homes selling within two weeks fell to less than a third of all listings, while half of all homes were selling in the first two weeks just over a year ago.
Still, for-sale inventory remains well below the 12-year average of at least 60,000 homes for sale, keeping prices high.
See also: Is the California ‘exodus’ over?
A year ago, Realtors predicted 2024 home sales would rise. Instead, they’re on track to match 2023’s slump, said Yun, NAR’s chief economist.
Last week, Realtors again forecast a rebound next year, predicting existing US home sales will rise 9-10% in 2025, with mortgage rates stabilizing in the 5.5%-6.5% range.
“Maybe the worst is coming to an end,” Yun said.
Here’s a county-by-county breakdown of Southern California’s September home prices and sales, with annual percentage changes:
—Los Angeles County’s median rose 1.6% to $850,000; sales were up 1.5% to 4,281 transactions.
—Orange County’s median rose 11.6% to almost $1.18 million; sales were down 7% to 1,787 transactions.
—Riverside County’s median rose 5.4% to $579,500; sales were down 8.2% to 2,407 transactions.
—San Bernardino County’s median rose 3.2% to $498,750; sales were down 18.2% to 1,612 transactions.
—San Diego County’s median rose 6.2% to $880,000; sales were down 6.4% to 1,987 transactions.
—Ventura County’s median rose 1.2% to $820,000; sales were down 2.6% to 489 transactions.