After several topsy-turvy years, Southern California's housing market is starting to look almost normal.
Home prices grew again in May, but not at the frenzied pace seen last spring. Sales are down, but mostly because there are fewer foreclosures to buy. More home sellers are testing the market. But big bidding wars are so last year.
All of it signals a housing market that's settling to a more stable, even healthy, pattern, which analysts say is a notable change from the big ups and downs of the bubble and its aftermath.
"The market's not bad," said Leslie Appleton-Young, chief economist for the California Assn. of Realtors, who sees prices going up but competition easing. "The urgency's gone. I think that's a positive thing. I really do."
The slowdown has been underway for months, but it showed up anew in home sales numbers out Wednesday for May, a big month for the key spring real estate season.
The median price of a home sold in the six-county Southland was $410,000, according to San Diego-based DataQuick. That's up 11.4% from the same month last year, the slowest annual gain since August of 2012, and just 1.5% above the median price recorded in April.
The number of sales, meanwhile, fell 15.1%, as investors continued to trickle out of the market and the supply of bargain-rate foreclosures dried up.
More and more, the market hinges on regular people buying houses with normal mortgages, and with lending standards still tight and the economy still feeling soft, there's only so much those people will pay.
"We're bumping along a ceiling. I really can't see values going up much more," said Steven Thomas, of ReportsOnHousing.com, which analyzes Southern California housing markets. "Buyers are homing in on trying to pay a fair value. A year ago, everyone was willing to pay extra. Now that bidding up is not happening."
That's good news for would-be home buyers, said John Venti, a real estate agent with Redfin who focuses on the San Fernando and San Gabriel valleys. This time last year, he said, his clients regularly got beat out by all-cash, above-asking-price offers. That's far less common now.
"It definitely has softened up a little bit," he said. "Instead of competing with 20 other offers, you're competing with four or five."
That's in part because even as sales have declined, the inventory of homes for sale has grown, with more traditional sellers wading into the market this spring. That's giving buyers more to choose from, but without a flood of new buyers, it means homes that feel overpriced are starting to sit on the market a little longer.
That's an unpleasant surprise for some sellers, especially those who were finally lured into the spring market by tales of bidding wars and double-digit price hikes, and then valued their homes accordingly. Mona Cohen, an agent with Rodeo Realty in Brentwood, finds herself more often having to play the bad guy with sellers who think their home is worth more than the market will bear.
"They still think they're in that little bubble of 2013, where you'd put it on the market and have 15 offers," she said. "That still happens in pockets. But buyers have become a lot more savvy."
Indeed, Cohen and other market watchers say they're starting to see more price reductions as sellers lower their sights to compete.
Still, no one is expecting home prices to go down overall. There's still more demand than supply, and well-priced homes are still selling quickly. Many experts just think the market will keep muddling along through summer.
FNC Inc., a real estate data firm based in Oxford, Miss., projects price gains in metro Los Angeles of six-tenths to eight-tenths of a point each month through October — positive, but roughly half of last year's pace.
In a recent note to clients, Thomas described a market on "cruise control" and said it would take a sharp improvement in the broader economy for home prices to pick up again.
"Jobs and everything else," Thomas said. "There needs to be a lot of healthy growth."
And in a region like Los Angeles, where the median-priced house costs seven times the median household income and housing affordability is a growing challenge, having a market that moves in tune with the fundamentals of the economy isn't such a bad thing, said Appleton-Young, even if it's growing a bit more slowly than it has been the last few years.
"Whatever normal means," she said, "I agree."