Southern California’s Spring Home Buying Season Sees Rising Prices and Limited Inventory

Southern California’s spring home buying season is in full swing, with bustling open houses, fierce bidding wars, and soaring prices. However, despite the excitement in the market, high mortgage rates and a lack of listings are still hindering home sales.

According to real estate data firm CoreLogic, the median price of a Southern California home reached $740,000 in February, marking a $35,000 increase from January. This surge in prices represents an 8% jump from February 2023, with Orange County hitting an all-time high median price of $1.11 million, up 17% from the previous year.

While sales saw a 12% increase in February, reaching 12,430 transactions, they still fell 27% below the average for the month due to affordability issues and limited inventory. This has made it challenging for industry professionals like agents, lenders, and home inspectors to sustain their income.

With 30-year mortgage rates hovering around 7%, fewer buyers can afford the average monthly house payment of $3,852. Additionally, homeowners with low-interest loans are hesitant to sell, further contributing to the lack of listings in the market.

The six-county region had 39,248 active listings in February, the lowest number for that month since at least 2011. This scarcity of inventory has led to fierce competition among buyers, driving prices even higher. Homes are selling rapidly, with some receiving multiple offers and selling well above asking price.

Despite the challenges posed by high mortgage rates and limited inventory, the real estate market in Southern California remains active and competitive. As prices continue to climb, industry professionals and potential buyers are navigating a market that shows no signs of slowing down.