The number of homes sold in Southern California dropped by 21.9 percent in just one month, according to property analytics provider CoreLogic.
The report, released on Tuesday, found that 17,369 new and existing houses and condos were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in September 2018. This number was seasonally adjusted, and is 21.9 percent lower than it was in August, the month prior, and 17.7 percent lower than it was last year.
The number of sales in this part of California has not been his low since September 2007, when only 12,455 homes were sold. Such numbers mirror similar, albeit less drastic trends, across the rest of the country: existing home sales dropped 3.4 percent to a seasonally adjusted 5.15 million units in September according to the National Association of Realtors, making it the sixth-consecutive month of flat or falling sales and the slowest sales pace since November 2015.
There are several reasons for the flagging sales: as home prices continue to rise and competition for affordable houses heats up, many buyers feel trapped in the current market and are waiting to see if the scales will shift in their favor.
“The double whammy of higher prices and rising mortgage rates has priced out some would-be buyers and prompted others to take a wait-and-see stance,” said Andrew LePage, a CoreLogic analyst, adding that September did have one less day for recording transactions. “[…] Adjusting for that, the year-over-year decline would be about 13 percent, still the largest in four years.”
But even with such slow sales, home values are still high — the median price paid for a home in Southern California was $523,000, up 3.6 percent year over year from $505,000 at the same time last year.
The signs that the market may finally be shifting in this part of the country are, however, all there — homes that sold for $500,000 or more accounted for 53.8 percent of all sales in September, down from 55.3 percent the month before and up from 51.2 percent last year.
“Price growth is moderating amid slower sales and more listings in many markets,” LePage said. “This is welcome news for potential homebuyers, but many still face a daunting hurdle – the monthly mortgage payment, which has been pushed up sharply by rising mortgage rates.”