The Southern California median home price slipped in July from June’s record high, but it was still up 5.8% from July 2017, according to data released Thursday by real estate firm CoreLogic.
The report showed that last month’s median price — the point at which half the homes sold for more and half for less — clocked in at $530,000 in the six-county region. That’s down $7,000 from June’s all-time high. Some agents say the market is slowing as families increasingly find it difficult to afford a home.
Sales were essentially flat, rising only 0.3% from July 2017.
“The craze has calmed down,” said San Fernando Valley real estate agent Matt Epstein.
Any slowdown would be welcome news for would-be buyers, who are dealing with not only high home prices but also rising interest rates. On Thursday, Freddie Mac said the average rate this week on a 30-year fixed mortgage was 4.52%, up from 3.82% a year earlier.
CoreLogic said that once the rise in mortgage rates is factored in, the monthly payment on a median priced house was up 13% over the year.
Agents say some buyers are getting burned out after dealing with a market that’s been on an upswing for more than six years.
Epstein said more homes are coming up for sale in the southeastern area of the San Fernando Valley he specializes in. As a result, buyers are being more selective, causing some properties with “unrealistic” asking prices to sit.
“I have seen a more patient-level buyer instead of that feeding-frenzy buyer,” Epstein said.
It’s not uncommon for the median price to fluctuate month to month, and prices are still up solidly from a year earlier.
Part of that is because housing construction hasn’t kept up with demand during the economic recovery, something that’s been blamed on opposition to new development from existing residents. Builders also have fewer financing options than they did during the bubble.
Some agents said they noticed a jump in listings in their markets. But data from Zillow show that, compared with last year, listings were up only 1.4% across Southern California in May and June, which is when many of the July deals would have opened escrow.
So, for now, demand continues to outstrip supply.
In Los Angeles County, the median price climbed 5.7% from a year earlier, to $607,500; in Orange County, 6.6% to $735,750; in Riverside County, 5.8% to $386,000; in San Bernardino County, 6.6% to $325,000; in San Diego County, 8% to $579,750; and in Ventura County, 6.3% to $595,000.
Sales in those counties ranged from a 3.5% drop in San Diego County to a 4.8% increase in Ventura County.
Unless there is a recession, economists generally expect prices to continue rising. Gains may slow as more people become priced out. The economy is too healthy and the shortage of homes for sale is too severe to expect a drop, they say.
“I definitely don’t foresee a dip,” said Selma Hepp, chief economist with California brokerage Pacific Union International. “It goes back to the inventory question — there continues to be a lack of inventory.”