Southern California Housing Market Trends at the End of 2023
As 2023 comes to a close, the housing market in Southern California is experiencing record-high prices and low sales volumes. According to data released by CoreLogic, home prices reached all-time highs in four out of six Southern California counties in November. However, the number of home sales across the region declined by 4 percent, with only 12,416 transactions taking place, the lowest total since February 2023.
CoreLogic noted that this was the smallest total for homes sold during any November since 1988. The four counties with record prices were Orange, San Bernardino, San Diego, and Ventura. Orange County saw a 15 percent increase in median home price, reaching $1.1 million, while San Bernardino County’s median rose to a record high of $519,500, a 12.9 percent increase. San Diego County and Ventura County also experienced significant median price increases.
The median home price for Southern California as a whole rose to $740,000 in November 2023, a 7 percent increase compared to the previous year. Low home inventory in the region has led to increased competition for homes and subsequently driven up prices.
One key factor contributing to the slow market is mortgage rates. The majority of homeowners in Southern California have mortgages at 4 percent or less, and many are holding onto their low-rate loans. However, a forecasted drop in mortgage rates is expected to attract more buyers to the market in the coming year.
Lawrence Yun, chief economist of the National Association of Realtors, predicts a 13.5 percent increase in U.S. home sales in 2024. “The demand for housing will recover from falling mortgage rates and rising income,” Yun stated. “In addition, housing inventory is expected to rise about 30 percent as more sellers begin to list after delaying selling over the past two years.”
As we head into 2024, the Southern California housing market is poised for potential growth and increased activity as buyers take advantage of lower mortgage rates and more inventory becomes available.