Southern California’s Spring Home Buying Season Underway: Rising Prices, Low Inventory, and High Mortgage Rates
Southern California’s spring home buying season is in full swing, with bustling open houses, competitive bidding wars, and soaring prices. However, the market is still facing 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 surge in prices is reflective of the ongoing trend of rising home values in the region.
In Orange County, the median home price hit an all-time high of $1.11 million, representing a 17% year-over-year increase. Prices in the Inland Empire rose by 4-5%, while Los Angeles, San Diego, and Ventura counties saw increases of 10-11%.
Despite the increase in prices, sales also saw a boost in February, with transactions climbing 12% to 12,430. However, this figure still falls 27% below the average for the month, highlighting the impact of affordability issues and limited inventory on the market.
Real estate professionals are feeling the effects of the challenging market conditions, with some agents struggling to maintain their income levels. High mortgage rates, averaging just under 7%, are deterring potential buyers who may not be able to afford the monthly payments.
Additionally, homeowners with low-interest loans are hesitant to sell their properties, further contributing to the lack of listings. This limited inventory has created a situation where demand outweighs supply, leading to fierce competition among buyers and driving prices even higher.
Despite these challenges, homes are selling quickly, with some properties receiving multiple offers above asking price. Open houses are drawing large crowds, and listings are going under contract within days of being listed.
Overall, the Southern California housing market continues to face obstacles, but the strong demand and competitive nature of the market are keeping prices on an upward trajectory. Agents and industry professionals are navigating these challenges as they work to meet the needs of buyers and sellers in the region.