Southern California Housing Market Is Cooling Amid COVID (LATimes)

Southern California home prices were essentially flat in August from the previous month, as the market cools slightly from its torrid pace earlier this year.

The six-county region’s median sales price — the point at which half the homes sold for more and half for less — was $680,000 last month, according to data released Monday by real estate firm DQNews. That’s a 0.1% slip from July.

Reflecting strong growth over the last year, the median was 13.9% above August 2020 levels. While sizable, that year-over-year gain was the smallest price rise since February.

Real estate agents say some home buyers have called it quits after engaging in bidding wars they never could win. And many analysts predicted home price gains would moderate soon, because incomes can’t support continued price appreciation at the 20% levels seen earlier this year.

Jennifer Eckert, a Los Angeles real estate agent with Nourmand & Associates, said some of her buyer clients stepped away this summer. But some are already back in the market, which they find is moving somewhat more slowly but is still competitive.

“Where maybe we’d see 10 to 15 offers [before], now we see two to five,” she said.

The pandemic market frenzy was in large part sparked by record low mortgage rates and the desire for more space. Still, as the market cools, few experts expect home values will decline in the near future, given the long-running mismatch between supply and demand.

According to a forecast from CoreLogic, which measures home prices slightly differently from DQNews, L.A. County home prices in July 2022 will have increased 2.7% from this July, compared with the 14.6% increase seen from July 2020 to July 2021.

Here’s how the price and sales gains broke down by county compared with a year earlier:

  • In Los Angeles County, the median price rose 13.4% to $785,000, while sales climbed 14.3%.
  • In Orange County, the median price rose 12.5% to $900,000, while sales climbed 4.5%.
  • In Riverside County, the median price rose 19.3% to $525,000, while sales climbed 6.4%.
  • In San Bernardino County, the median price rose 22.4% to $465,000, while sales climbed 9.2%.
  • In San Diego County, the median price rose 13.3% to $725,000, while sales climbed 3.5%.
  • In Ventura County, the median price rose 14.8% to $740,250, while sales climbed 1.3%.

** Sourced from LA Times