Southern California Home Prices Reach Record High Despite Sluggish Sales and High Mortgage Rates

Southern California home prices reached a new record high in May, despite sluggish sales and high mortgage rates. According to real estate data firm CoreLogic, the region’s median home price climbed to $770,000, setting new records in Los Angeles, Orange, and San Diego counties. Riverside County also matched its record high from April.

The housing market in Southern California continues to defy expectations, with prices rising in all but nine months over the past 13 years. Sales were up slightly in May, but not enough to offset the slow pace of transactions. Economists attribute the rising prices to factors such as low inventory, high interest rates, and the “locked-in effect” of homeowners with low mortgage rates from the pandemic era.

Despite the increase in listings in recent months, the market remains highly competitive, with bidding wars still common in desirable neighborhoods. Sellers are eager to take advantage of the current market conditions, while buyers are facing higher mortgage payments due to rising interest rates.

While some experts express concerns about a potential housing bubble, others believe that prices will continue to rise if interest rates are lowered later this year. The market dynamics vary by county, with Orange County seeing the highest median price increase at 20% to $1.2 million.

Overall, the Southern California housing market remains hot, with no signs of cooling down anytime soon. Buyers and sellers alike are navigating a challenging market landscape, with both risks and opportunities on the horizon.