Southern California home prices stayed essentially flat in September, holding steady for the third straight month and providing further confirmation that the market has cooled.
The median home price dipped slightly from $385,000 in August to $382,000 last month, while sales tumbled, research firm DataQuick said Wednesday.
More homes have arrived on the market as demand waned, with buyers fed up with the frenzied competition and reluctant to move with their children back in school. Bidding wars have eased, price appreciation has slowed and investors -- once a dominant force -- have pulled back.
“We’ve seen a fairly normal downshifting in the housing market this fall,” DataQuick President John Walsh said in a statement. “Couple that with the rise in inventory, higher mortgage rates and the ongoing, gradual drop in purchases by investors and cash buyers, and it's no wonder prices have leveled off in recent months.”
The cooling represents a sharp change from earlier this year, when bidding wars and heavy investor demand sent prices climbing rapidly. That caused some observers to warn markets were becoming overheated.
But investors are playing less of a role now, as sharply higher prices have made new investments less attractive. Absentee buyers — mostly investors — purchased 26.3% of homes sold last month, the lowest percentage since November 2011.
A total of 19,112 houses and condos sold in September throughout the six-county region, a 17.1% drop from August. That’s a far sharper decline than the typical seasonal slowing, according to DataQuick. Since 1988, when the firm starting tracking the market, sales have fallen an average of 9.3% from August to September.
The housing market recovery continues but the cooling represents more of a return to a normalized market, agents and experts say. Prices in the Southland are 21.3% higher than last year — although the pace of the year-over-year gains has eased as well. Sales were up 7% over the year.
In Los Angeles County, the median increased 25% from last year to $425,000. In Orange County, buyers shelled out a median of $550,000, or 22.2% more than a year earlier.