Southern California Housing Market Update: June 2023

Southern California’s housing market continues to face challenges as home prices rise and inventory remains low. In June, the median price of a Southern California home reached $730,000, down just 0.7% from the previous year. Despite the slight decrease in price, the region has seen a 9% increase in home prices since the beginning of the year.

The low inventory levels have led to limited home sales, with only 16,320 transactions in June, the lowest for any June in 36 years. This marks the 19th straight month of year-over-year sales declines. The imbalance between buyers and sellers continues to put pressure on home prices, with four out of 10 U.S. home sales being cash transactions.

The rising mortgage rates, which averaged 6.7% in June, have also impacted the housing market. Entry-level buyers, especially in the Inland Empire, are facing challenges as the minimum income needed to afford an entry-level home has increased. Redfin reported that there is no longer such thing as a “starter home” as the most affordable homes are no longer within reach for buyers with lower budgets.

Despite these challenges, experts project that home price appreciation will continue to accelerate, reaching 6.8% by next January. While mortgage rates are expected to remain elevated for the next few months, they are likely to start coming down before the end of the year.

Overall, the Southern California housing market is facing a complex mix of factors that are impacting both buyers and sellers. As the region continues to navigate these challenges, it will be important to monitor how the market evolves in the coming months.