Southern California Home Prices Hit All-Time High in June 2021

Southern California home prices continue to soar, reaching an all-time high in June 2021. The average home price in the six-county region now stands at $876,280, with Orange County leading the way at $1.16 million. This surge in prices is making it increasingly difficult for prospective home buyers to afford a home in the expensive region, especially with interest rates at their highest in over 20 years.

Despite the challenges, there may be some relief on the horizon. Economists attribute the rise in home values to a shortage of homes for sale, but this shortage is starting to ease as the number of homes for sale in L.A. County rose 22% in June from a year earlier. However, many homeowners are still holding on to their ultra-low-rate mortgages, contributing to the limited supply of homes on the market.

While some experts believe that home prices will eventually stabilize, others argue that California has long built too few homes relative to demand, making a significant price drop unlikely. Nonetheless, the nearly 8% annual price increase in June is the lowest in recent months, suggesting that a slowdown in price growth may be on the horizon.

Richard Green, director of the USC Lusk Center for Real Estate, anticipates a slowdown in home price growth, stating that “prices can’t go up 8% a year forever.” As the market continues to evolve, prospective home buyers will need to stay informed and prepared for potential changes in the real estate landscape.