Southern California Home Prices Dip in November, First Decline in Nine Months
Southern California Home Prices Dip in November, First Decline in Nine Months
In a surprising turn of events, Southern California home prices saw a slight dip in November, marking the first decline in nine months. According to data released by Zillow, the average home price in the six-county region fell to $829,557, down 0.1% from October.
While all counties experienced drops in home prices, Orange County was the exception, with values actually rising slightly. Nicole Bachaud, a senior economist with Zillow, attributed the small price declines to the typical slowdown in home sales during the fall season, as well as the challenges buyers are facing with high prices and mortgage rates.
The California Assn. of Realtors reported that only a small percentage of households in Los Angeles and Orange County could afford a median-priced house during the third quarter, highlighting the affordability crisis in the region. Despite the recent dip in prices, most counties are still near their all-time peaks, with Orange County even setting new records.
Prospective buyers received a bit of good news as mortgage interest rates have fallen slightly in recent weeks, giving them a bit more buying power. However, experts caution that affordability is still a major concern, with high mortgage rates likely to keep inventories tight and prices from surging.
Looking ahead, Zillow expects home prices to rise slightly in the Inland Empire counties of Riverside and San Bernardino, while prices in Los Angeles, Orange, San Diego, and Ventura counties are expected to either fall or remain flat. In the rental market, prices are also dropping slightly as vacancies rise and consumers worry about the economy and inflation.
While there is growing optimism that the country will avoid an economic downturn, the possibility of further drops in home values and rents looms if the Federal Reserve’s actions to tame inflation push the economy into recession. Despite the challenges, experts remain hopeful that the Southern California real estate market will weather the storm and continue to thrive in the coming months.