Southern California’s housing market cooled since last spring’s crazed homebuying frenzy. But not much.
Agents say they get fewer offers, but there are still bidding wars. Sales are closer to the asking price, but many homes still sell above asking. Some buyers still are waiving inspection or appraisal contingencies or letting the sellers stay a month or two rent-free after closing.
And home prices continue to rise, setting another record in October, DQ News/CoreLogic reported Thursday, Nov. 18.
The median price for a Southern California home, or price at the midpoint of all sales, hit $690,000 in October, the report said. That’s up $85,000, or 14%, in the 12 months ending in October. It marked the eighth month this year that Southern California’s median price set a record and the 12th since pandemic lockdowns began in March 2020.
At the past year’s pace, price hikes averaged about $1,600 a week since October 2020.
Record median home prices also were recorded in Orange County ($920,000) and Riverside County ($535,000). At $465,000, San Bernardino County’s median tied the record set in August.
All six Southern California counties also recorded double-digit year-over-year price gains last month.
“The double-digit increase in home prices reflects continued robust demand amid record-low levels of for-sale inventories,” said Selma Hepp, CoreLogic’s deputy chief economist.
Hepp also noted there’s been a continued shift in sales toward higher-priced homes, which skews the median upward.
On the other hand, October home sales decreased to 22,837 transactions, down 1,623 homes or 6.6% from October 2020 levels, DQ News/CoreLogic figures show.
Despite the decline, last month’s sales still were 9% above the pre-pandemic level in 2019, and 10% above the average for the nine years since the housing crash ended in 2012.
“In aggregate, total sales for 2021 will still be the strongest since 2009,” Hepp said.
Homes averaged 12 days on the market last month before going into escrow, Zillow figures show. That’s up from eight days in the Inland Empire last spring and from 10 days in Los Angeles and Orange counties. Essentially up, but only a notch.
By comparison, homes took 23 days to sell in L.A. and Orange counties in October 2019 and 27 days in the Inland Empire.
“I don’t think it’s slowing down. I think it’s stabilizing,” said Aaron Buencamino, an agent with DH Realty of La Habra.
While sales did slow last month, Buencamino said his team of agents hasn’t seen it.
“We haven’t seen any change as far as offers go or competition,” he said. “And as for listings, they’re getting 30 offers, still.”
Southern California home listings slowly began to rise last winter, reaching a peak of 43,024 homes for sale in September, Zillow figures show. But then listings dropped to 41,831 homes for sale in October.
Listings are 15% below October 2020 levels, leaving home shoppers with fewer homes to compete over.
Low mortgage rates are drawing more home shoppers to the market. The average rate for a 30-year mortgage slipped below 3% last week for the fifth time on record.
“It’s still insane,” Long Beach broker Crystal West, of West City Realty and Lending, said of the housing market. Some homes are going for about $25,000 above asking, she said.
“People are still out there buying, even at this point with the kids in school and getting close to the holidays,” West said. “Interest rates are low. Last week, they dropped, and people saw it as an opportunity to get in (the market). We’re seeing inflation in personal goods and deflation with interest rates.”
National Association of Realtors Chief Economist Lawrence Yun predicted last week that a 30-year, fixed-rate mortgage will to rise to 3.7% by next fall.
If rates do indeed go up, West said, “we’re going to see a slowdown.”
Vanessa Jackson of SetSchedule in Irvine said that while agents used to see 15-20 offers on a home last spring, they now see about six.
“It has cooled down,” Jackson said during a break in the NAR conference last Saturday in San Diego. “(Homes) were going for $50,000 to $100,000 above asking before. Now they’re going for $30,000 to $40,000 (above asking). … What’s crazy is people are paying retail prices for (homes) that need to be fixed up.”
In Orange County, record prices also were recorded for existing houses and condos, DQ News/CoreLogic figures show. The median price of an existing condo hit a record $655,000, the highest in the region. The median for an existing house hit $1.04 million.
But sales were down year over year in all six counties, with declines ranging from just under 1% in L.A. County to more than 12% in San Diego County.
Here’s a county-by-county breakdown of median prices and sales:
— Los Angeles County’s median rose 10.5% to $790,000; sales were down 0.9% to 7,528 transactions.
— Orange County’s median rose 15.7% to $920,000; sales were down 13.6% to 3,257 transactions.
— Riverside County’s median rose 20.2% to $535,000; sales were down 6.0% to 4,093 transactions.
— San Bernardino County’s median rose 16.3% to $465,000; sales were down 5.3% to 3,129 transactions.
— San Diego County’s median rose 13.8% to $740,000; sales were down 12.4% to 3,755 transactions.
— Ventura County’s median rose 10.7% to $725,000; sales were down 6.5% to 1,075 transactions.
Source: Orange County Register