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, the market continues to face challenges due to high mortgage rates and a lack of listings.
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 figure tied with July for the third-highest median price on record and was up 8% from February 2023. In Orange County, the median price surged 17% year over year to an all-time high of $1.11 million.
Prices in the Inland Empire rose by 4-5%, while they increased by 10-11% in Los Angeles, San Diego, and Ventura counties. Despite the rising prices, sales saw a 12% increase in February, totaling 12,430 transactions. However, transactions were still 27% below the average for the month, primarily due to affordability issues and limited listings.
Real estate professionals are feeling the impact of the sluggish market, with many struggling to maintain their income levels. Ignacio Ramirez, an agent with Klovus Realty in Pasadena, noted that 2021 was a better year for him compared to 2022 and 2023. The high mortgage rates, averaging just under 7%, are deterring potential buyers who cannot afford the monthly payments.
Broker Al Ricci of Orange highlighted that homeowners with low-interest loans are reluctant to sell their properties, contributing to the lack of inventory. The region had 39,248 active listings in February, the lowest number for that month since at least 2011. With limited inventory, competition remains fierce, driving prices even higher.
Despite the challenges, homes are selling rapidly, with multiple offers pouring in for each listing. Agents like Angie Santo in Cypress and Al Ricci in Orange are witnessing strong demand and quick sales. However, the scarcity of inventory is hindering the market’s growth, as sales prices continue to climb.
The county-by-county breakdown of median home prices and sales shows significant increases across the board. Los Angeles County saw a 10.5% rise in median price, Orange County hit a record high of $1.11 million, and other counties experienced similar upward trends in both prices and sales.
As the spring home buying season progresses, the Southern California real estate market faces a balancing act between high demand, limited inventory, and affordability concerns. Agents and industry professionals are navigating these challenges as they strive to meet the needs of buyers and sellers in a competitive market.