Southern California home prices rose 7.3% in July compared to a year earlier, the smallest gain in more than two years, a research firm said Wednesday.
The July figures, released by CoreLogic DataQuick, indicate the region's housing slowdown deepened last month. Compared to June, the median home price dipped 0.5% to $413,000.
The slowdown largely came down to more supply and less demand.
More homes have come onto the market recently, but with prices sharply higher than past years, there are simply fewer buyers able to afford them. Bidding wars, and in turn, price appreciation have tapered off.
A total of 20,369 new and resale houses and condos sold in the six-county region in July, down 12.4% from a year earlier.
“Prices came a long way in a couple of years, and now a lot of would-be buyers just can’t stretch their finances enough to buy in today’s more conservative lending environment,” CoreLogic DataQuick analyst Andrew LePage said.
Investors continued their retreat in July, after flooding the market with all cash offers last year. Absentee buyers—mostly investors—purchased 23.6% of homes last month, the lowest level since December 2010.
All cash purchases also declined.
Most economists say this year’s slowdown isn’t a cause for great concern. Price appreciation is returning to a more sustainable level, they say, after reaching a pace last year that was not supported by income growth.
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