A once speedy Southern California housing market has hit a curve, putting the brakes on prices and dropping July sales to a 27-year low.
Prices in the shadow of rising mortgage rates edged down for a second straight month as sales dropped to their third-lowest level since the pandemic, the Orange County Register reported, citing new data from CoreLogic and DQNews.
Bidding wars now are scarce. Sellers are cutting prices. And homes take longer to sell.
The rising rates have priced some buyers out of the market, while others wait for prices to fall.
“We hear it every day: ‘We just want to see where the market is headed,’” Suzanne Seini, CEO of Irvine-based Active Realty, said of home shoppers. “There are not as many buyers now.”
The median price of a home in six Southern California counties fell to $740,000 in July, down 1.3 percent from the month before and down 2.6 percent from April’s all-time high of $760,000, according to CoreLogic figures released by DQNews.
Last month’s median price was still 8.8 percent higher than in July of last year. But it marks the smallest annual price gain, and the first single-digit increase, in 23 months.
July sales toppled 34.8 percent from last year to 16,390 transactions, according to DQNews/CoreLogic. Last month’s sales fell 20 percent from June, marking the second slowest July in records dating back to 1988. The last July with fewer sales was in 1995.
Blame higher mortgage rates for the slower sales and sluggish price growth, said Redfin Chief Economist Daryl Fairweather.
“When mortgage rates go up and make borrowing to buy a home less affordable, more homeowners are just simply priced out,” Fairweather said. “And in Southern California, those higher mortgage rates can translate into hundreds, if not thousands, of extra dollars a month.”
Mortgage rates averaged 5.39 percent in the three months ending in July, compared with 2.94 percent a year earlier.
Slowing sales have increased inventory. Southern California had 32,344 homes for sale as of Aug. 4, up 53 percent from a year earlier, according to Reports on Housing.
In Los Angeles County, the median price of a home rose 5.7 percent last month from July 2021 to $840,000, while sales were down 33 percent to 5,491 transactions.
In Orange County, the median rose 10.5 percent to $1 million, while sales were down 38 percent to 2,277 transactions.
In Riverside County, the median rose 10.4 percent to $579,500, while sales were down 32.5 percent to 2,971 transactions. San Bernardino County’s median rose 13.2 percent to $515,000, with sales down 31.5 percent to 2,237 transactions.
In Ventura County, the median rose 10 percent to $805,000, while sales were down 35.5 percent to 747 transactions. San Diego County, meanwhile, saw its median rise 9.5 percent to $800,000, while sales were down 39.8 percent to 2,667 transactions.
— Dana Bartholomew
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