Southern California home prices in September tied an all-time high, as the white-hot real estate market continued to surge and raise concerns over housing affordability.
The median price for the six-county region soared nearly 10% from a year earlier, to $505,000, data firm CoreLogic said Tuesday. That matches a price level reached in 2007 before the housing bubble burst and the economy cratered.
In some corners of the Southland, home prices have already risen past their peaks.
In Los Angeles County, the median last month was $575,000, up 9.5% from a year earlier and $25,000 higher than its 2007 peak.
In Orange County, September’s median was $710,000, up nearly 11% from a year earlier and $65,000 from the 2007 height.
Economists have said today’s upswing is more sustainable, driven not by risky lending but by an improving economy, historically low mortgage rates and a shortage of homes for sale. Adjusted for inflation, prices in all counties are under their 2007 peaks; the Southern California median is about 13% below its peak.
Even so, the rising cost of housing is increasingly sparking worries across the state.
A UC Berkeley poll this year found 56% of voters considered moving to find a more affordable home, with a quarter saying they’d likely leave California to do so.
Business groups say employers are having difficulty recruiting workers from outside the state, which some economists cite as one reason job growth has slowed this year.
The surge in home prices isn’t limited to California. Values are up nationwide as the economy expands. But affordability is a far greater problem here, with even lower-cost areas commanding a significant down payment. In Riverside County last month, the median hit $360,000, up 7.5% from a year earlier. In San Bernardino County, prices climbed 8.7%, to $325,000.
Although California has long been more expensive than the nation, research from the nonpartisan state Legislative Analyst’s Office shows the gap is growing.
Economists generally agree that's because developers for decades have built too few homes for population and job growth. Experts have cited a variety of reasons for the slow pace of construction, with neighborhood opposition and tight environmental regulations among the major factors.
To help address that problem, Gov. Jerry Brown this year signed a handful of housing-related bills, including ones that would ease some development restrictions and raise money for below-market housing.
However, housing groups and state officials noted the proposals were modest compared with the scope of the housing shortage, and hardly a cure.