Southern California Housing Market Shows Signs of Recovery After Last Year’s Decline

Last year, rising mortgage interest rates put a damper on the previously hot Southern California housing market. Buyers backed off, sales plummeted, and home prices experienced a sustained slide for the first time in a decade. However, recent data suggests that the market may be on the rebound.

According to various data trackers, home prices in Southern California have started to tick up in the last few months. The median sales price for an existing single-family house rose 2% in April to $785,000, marking the third consecutive month of price increases. While some sources show prices continuing to fall, the overall trend seems to be pointing towards a recovery.

The resurgence in home prices can be attributed to a higher willingness among buyers to re-enter the market this spring. A decline in mortgage rates, along with the belief that rates may not fall further, has encouraged buyers to make their move. First-time buyers, in particular, are eager to escape high rents and secure a place of their own.

On the other hand, many homeowners are holding off on selling, unwilling to give up their low mortgage rates for higher borrowing costs. This has led to a decrease in the number of homes for sale, creating a more competitive environment for buyers.

If you’re in the market to buy a home now, be prepared for increased competition. Open houses are busier, and bidding wars are becoming more common. While prices are still lower compared to previous peaks, they are on the rise, so acting sooner rather than later may be beneficial.

Experts predict that home prices will continue to climb, albeit at a more modest pace than during the pandemic. Factors such as mortgage rates and the overall economy will play a role in determining the future direction of the market. While there is potential for prices to drop again, the current outlook suggests a gradual increase in home values in the coming months.