Southern California’s housing slowdown may be bottoming out, with January home sales rising from year-ago levels for the first time in more than two years.
Sales had been falling on an annual basis for 25 straight months — until now.
While this past January broke that trend, its tally of 10,581 transactions still ranked as the third-lowest in records dating back 36 years, according to CoreLogic housing data released Thursday, Feb. 29.
The nearly 7% annual sales gain occurred mainly because the prior January was the all-time slowest month on record.
Home prices, meanwhile, continued to climb amid a severe shortage of homes for sale, CoreLogic reported.
The median price of a Southern California home — or the price at the midpoint of all sales — was $705,000 in January, up by more than 5% from the year before.
Despite the gain, January’s median was down from the previous nine months. The month is typically the slowest of the year, reflecting deals signed during the holiday season, when buyers and sellers typically take a break.
See also: Southern California home prices defy ‘brutal year’ for real estate
Here are the highlights from CoreLogic’s latest report:
— January’s median price was $45,000 below the all-time high of $750,000 reached in April 2022, right before high mortgage rates combined with high prices to chill buyer demand.
Prices fell month-to-month starting in May 2022, dropping $80,000 to just under $670,000 in January 2023. Then, a rapid decrease in listings revived buyer competition, with prices fluctuating between $705,000 and $740,000 since last spring.
— Both prices and sales were up year-over-year in all six Southern California counties.
Orange County had the biggest gain in both prices and sales, with the median up 12% to nearly $1.07 million. Sales increased 13% year-over-year.
Los Angeles County had the smallest price gain percentage-wise, with the median rising 4.6% to $800,000.
The Inland Empire continued to have the best housing bargains, with a median price of $475,000 in San Bernardino County and $550,000 in Riverside County. But their annual price growth was a tepid 5.6% in San Bernardino County and 2.1% in Riverside County.
See also: Real estate agents, industry providers grapple with slowest market in 35 years
— A lack of homes for sale continued to prop up prices.
According to Redfin, the region averaged fewer than 39,000 homes for sale in November and December, when most of January’s transactions went under contract, Redfin figures show.
The region had 37,594 active listings in January, down 8% from the previous year and 39% below the average for the previous 11 years. All six Southern California counties saw declines in for-sale inventory in January, according to Redfin.
— High mortgage rates continued to dampen both sales and listings.
Interest rates for the popular 30-year, fixed-rate mortgage averaged 7.4% in November and 6.8% in December, according to Freddie Mac.
The typical monthly payment for a Southern California home was nearly $3,800 in December, not counting taxes, insurance and the HOA, or homeowner association dues.
In addition to dampening demand, higher rates discouraged existing homeowners from giving up their low mortgage rates and selling.
The average 30-year mortgage rate lingered below 4% for almost three years, allowing most homeowners to lock in record-low rates.
— 2024 is projected to see improved sales and higher prices, since the industry is emerging from the slowest year on record.
Mortgage rates are expected to moderate as the Federal Reserve lowers interest rates. That, in turn, is likely to lure more home shoppers into the market.
Here’s a county-by-county breakdown of home prices and sales, with year-over-year percentage gains:
—Los Angeles County’s median rose 4.6% to $800,000; sales were up 8.0% to 3,335 transactions.
—Orange County’s median rose 12.1% to nearly $1.07 million; sales were up 12.9% to 1,428 transactions.
—Riverside County’s median rose 2.1% to $550,000; sales were up 8.7% to 2,259 transactions.
—San Bernardino County’s median rose 5.6% to $475,000; sales were up 3.7% to 1,533 transactions.
—San Diego County’s median rose 7.0% to $802,500; sales totaled 1,678 transactions, unchanged from the prior January.
—Ventura County’s median rose 8.7% to $799,000; sales were up 2.7% to 348 transactions.
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Source: Orange County Register
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