LA County home sales slowed in August, but prices kept rising: report

Rising mortgage rates and too few affordable homes were major factors

Los Angeles /
Sep.September 26, 2018 04:22 PM
CoreLogic analyst Andrew LePage and Van Nuys

Southern California saw the slowest summer for home sales in four years.

June to August sales fell 6.8 percent year over year in the SoCal area, according to a new CoreLogic report. That covers Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura counties.

The slowdown was unusual. Year-over-year summertime sales have fallen just five times in the last 20 years, said Andrew LePage, a CoreLogic analyst. He pegged the slowdown on a lack of affordable inventory. Year-over-year sales in SoCal below $500,000 fell by 17.8 percent.

“The drop in affordability is the result of both price hikes and a significant rise in mortgage interest rates this year,” he said, adding that the monthly mortgage rate on a median-priced home jumped 16 percent since a year ago.

In L.A., exactly 700 fewer homes sold in August compared to a year earlier — an 8.5 percent drop in sales. Prices have continued to push up. The median sales price in August was $615,000, or 7 percent higher than in August 2017. While the lower ends of the market have seen a softening, the higher end of the market has continued to hold strong.

Some 7,497 homes sold in L.A. County last month, CoreLogic said. That was down year-over-year, but was 1.2 percent higher than July sales.

Rising interest rates have some buyers scrambling to buy now to lock in a lower rate. Interest rates are expected to climb in the near future thanks to hikes in the federal benchmarket lending rate.

CoreLogic released their report the same day that the Federal Reserve voted to hike the benchmark rate by another quarter-percentage point to between 2 and 2.5 percent. Federal officials cite a strong economy as a reason to raise rates, as higher rates help curb inflation.


Related Articles

arrow_forward_ios
Aerial Shot of a Suburban Street in San Fernando Valley (Getty)
San Fernando Valley home prices top another record in May
San Fernando Valley home prices top another record in May
(iStock)
SoCal home sales kept rising in April
SoCal home sales kept rising in April
(iStock)
SoCal home prices keep rising while supply dwindles
SoCal home prices keep rising while supply dwindles
PG&E CEO Patricia K. Poppe, San Diego Gas & Electric CEO Caroline Winn and Southern California Edison CEO Kevin M. Payne. (Getty, PG&E, SDGE, Edison)
PG&E among utilities looking to cut subsidies on solar homes
PG&E among utilities looking to cut subsidies on solar homes
(iStock)
Did pandemic really trigger mass exodus from California?
Did pandemic really trigger mass exodus from California?
(iStock)
Southern California housing rush was unabated in January
Southern California housing rush was unabated in January
Orange County, CA (iStock)
SoCal home sales prices and volume surge
SoCal home sales prices and volume surge
Affirmed Housing CEO James Silverwood and the development site (Affirmed, Google Maps)
Affordable developer proposes complex in Chatsworth
Affordable developer proposes complex in Chatsworth
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...