Housing slowdown: Southern California home prices flat in August

The median home price in Southern California remained unchanged in August from the previous month, as rising mortgage rates made homes unaffordable for many.

The median price in the six-county area held steady at $740,000, the fourth straight month of no gains, according to data released Tuesday by real estate firm DQNews.

Sales of new and existing homes, condos and townhouses fell 28.3% year over year.

The housing market has slowed sharply in recent months as a result of rising mortgage rates that have driven many would-be buyers out of the market.

Rates more than doubled last year and last week topped 6 percent for the first time since 2008. The sharp rise in borrowing costs has added more than $1,000 to monthly payments on a median-priced home of $740,000 — a cost that many cannot afford. Can not afford.

For buyers who can afford the gains, there are some bright spots. The median price in Southern California — where half the homes sold for more than half and the price for less than half — is 2.6 percent below the all-time high reached this spring.

The buying experience can be less stressful than the white-hot market in recent years, without the need to bid on dozens of homes before getting them or giving them up entirely.

“That maddening competition is over,” said Jeff Lazerson, president of brokerage Mortgage Grader, noting that sellers are more open to low-down-payment offers they’d previously overlooked.

In August, sales fell in all counties across the country, as did prices in most areas.

Los Angeles County: The median price was $820,000, down 2.4% from July and up 4.5% from a year earlier. Compared to August 2021, sales fell 28.6%.

orange county: The median price was $984,000, down 1.6% from July and up 9.3% from a year earlier. Sales have fallen 31.5% since August 2021.

Binjiang County: The median price was $581,500, up 0.3% from July and up 10.8% from a year earlier. Sales have fallen 24% since August 2021.

San Bernardino County: The median price was $500,000, down 2.9% from July and up 7.5% from a year earlier. Compared to August 2021, sales were down 31.4%.

Ventura County: The median price was $782,250, down 2.9% from July and up 5.6% from a year earlier. Compared to August 2021, sales were down 27.7%.

San Diego County: The median price was $799,000, down 0.1% from July and up 10.2% from a year earlier. Sales have fallen 27.1% since August 2021.

For individual counties, median declines were greater than the region as a whole, ranging from a 2.8% lower all-time high in Riverside County to a peak of 6.7% lower in Orange County.

Compared to July, the median fell in all counties except Riverside. In Orange County, the median fell below $1 million, a threshold the county first reached in March.

Because the median is the midpoint of all sales, changes in it reflect both changes in actual values ​​and changes in the type of home sales in a given month.

Selma Hepp, an economist at real estate firm CoreLogic, said the decline in the stock market led to a steeper decline in luxury home sales, exaggerating the median decline.

A Zillow measure of home prices, which attempts to explain this change in the mix of home sales, shows that the typical home in Orange County is still priced above $1 million, with prices in Southern California not falling as much. Median representation.

Zillow data shows that the decline since the peak has ranged from an all-time high of 0.5% in San Bernardino County to a 2.6% drop in San Diego County.

By any measure, prices in all counties were higher than a year ago, reflecting strong demand before interest rates spiked.

Across the region, the median is 8.8 per cent higher than a year ago, and higher interest rates mean housing is even more unaffordable than it will be in 2021.

The year-on-year price increase is smaller and smaller. Home prices rose nearly 17% year-on-year in April, and a growing number of economists are predicting that prices will turn negative year-on-year in 2023.

But few, if any, major analysts predict a recession similar to the Great Depression.

That’s in large part because even in a recession, experts say stricter lending standards should limit the number of foreclosures, a wave of which caused prices in Southern California to drop 50 percent from 2007 to 2009 .

According to the California State Association. Statewide and Southern California home prices are likely to fall by about 7% in 2023 compared to 2022, in part because mortgage rates are expected to remain high, according to realtors.

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