Peak LA: Home prices tie all-time high, but fewer properties sell

Years of rising prices have pushed homes out of reach for many buyers

CoreLogic Research Analyst Andrew LePage
CoreLogic Research Analyst Andrew LePage

Peak L.A. means a lot of things, but in this case, it’s the housing.

Fewer homebuyers are entering Los Angeles County, but when they do they’re paying more than ever.

The median sales price in L.A. County hit $615,000 in May, tying an all-time record, according to CoreLogic data first reported by Curbed. At the same time, the number of sales dropped 3 percent year-over-year to just under 7,100.

While median price is as high as it’s ever been, price growth is slowing. Year-over-year growth in May was just 1.7 percent, compared to 8 percent growth from May 2017-May 2018. That suggests that buyers can’t support the strong price growth that the market has seen in recent years.

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“The flattening out of home price growth reflects the erosion of buyer affordability after years of rising home prices and last year’s run-up in mortgage rates,” CoreLogic analyst Andrew LePage wrote in a monthly report on the data.

Sales have fallen consistently over the last 10 months across the wider Southern California region.

Meanwhile, 30-year mortgage rates stopped climbing earlier this year and fell slightly back down to just under 4 percent, where they’ve stayed since. Analysts say that should help boost sales this year.

Rising prices have slowed sales across all segments of L.A.’s residential market, including at the top end. Hesitant to slash prices, agents and sellers are trying to entice buyers in other ways, such as covering closing fees themselves. [Curbed]Dennis Lynch