Another month, another record: SoCal home prices hit all-time high
Southern California’s real estate market hit another historic peak in June, with home prices soaring to yet another all-time high, though analysts see the extreme bidding wars of the last year beginning to ease.
June’s median home price of $680,000 tops the previous record of $667,000, set in May, according to data released Tuesday by data firm DQNews. It represents a 22.5% increase from June 2020, when the market in the six-county region slowed significantly as sellers pulled homes off the market because of COVID-19 stay-at-home orders.
Since then, a dramatic rebound has seen 11 straight months of double-digit median home price rises.
Inventory is growing, but the buyer pool is staying the same. That equates to lower sales prices.
— Brent Chang, Compass agent
Experts credit multiple factors: fast-expanding buyer markets such as millennials, more demand for space as more people work from home, and ultra-low mortgage rates, which are attracting wealthy investors who compete with the middle class for limited housing stock.
“The low interest rates are creating a situation where it can be cheaper to buy a house than rent one, especially if you’re an investor looking to rent it out. That’s not normal,” said Jason Oppenheim, founder of Oppenheim Group and star of Netflix’s “Selling Sunset.”
As L.A. pulls out of the pandemic-induced recession, he said, the pent-up demand could make for a hot Southern California market through the rest of the year and beyond.
Sales are also on the rise, signaling a possible easing of the supply shortage that has caused bidding wars and seen properties sell for hundreds of thousands over the asking price.
In June, 27,012 homes traded hands, a sizable jump from the 24,064 that sold in May and the 17,743 that sold in June 2020.
- In Los Angeles County, the median home price rose 23.1% to $790,000 in June, while sales climbed 68.9% year over year.
- In Orange County, the median home price rose 17.6% to $900,000, while sales climbed 67.2%.
- In Riverside County, the median home price rose 20% to $510,000, while sales climbed 43.8%.
- In San Bernardino County, the median home price rose 21.3% to $442,750, while sales climbed 41.7%.
- In San Diego County, the median home price rose 24.9% to $750,000, while sales climbed 34.5%.
- In Ventura County, the median home price rose 22.7% to $736,000, while sales climbed 47.6%.
With more houses steadily being listed for sale, Compass agent Brent Chang said he thinks the historic seller’s market could calm down before the end of the year.
“With every new article that comes out about how great the market is for sellers, a new wave of homeowners put their houses on the market. One agent I know is listing five properties a week,” he said.
As for buyers, he thinks everyone who’s willing to overpay for a house already has, so the surge of bidding wars might slow down in the next few months.
“Inventory is growing, but the buyer pool is staying the same,” he said. “That equates to lower sales prices.”