The Southern California median home price was flat in August, while sales dipped from a year earlier as buyers struggled to afford sky-high housing costs.
The six-county region’s median price clocked in at $535,000 last month, unchanged from August 2018, according to a report released Wednesday from real estate data provider CoreLogic. Meanwhile, buyers purchased 1.2% fewer homes than a year earlier.
The data come after the sluggish housing market perked up slightly in July, with sales rising for the first time in 12 months. Analysts attributed that uptick to a sustained drop in mortgage rates. Last week, the average rate on a 30-year mortgage actually rose the most since October, but at 3.73% was still about a percentage point lower than a year ago, according to Freddie Mac.
A combination of flat prices and lower mortgage rates means the median priced home today is less expensive than a year earlier, equating to a monthly mortgage savings of $229 if a buyer got the 3.73% rate and put 20% down on a $535,000 house.
August’s decline in sales wasn’t as steep as in the second half of last year, when sales plunged by nearly 11%. But the number of sales in August was still the lowest in four years, and the data indicate lower borrowing costs haven’t meaningfully changed the direction of prices, which have barely budged this year and even declined 0.4% in March — the first dip since 2012.
“Some buyers no doubt remain parked on the sidelines, concerned about the possibility of buying near a price peak, and affordability remains a challenge for many,” CoreLogic analyst Andrew LePage said in a statement.
Stuart Gabriel, director of the Ziman Center for Real Estate at UCLA, said consumer concerns about the broader economy have played a role in the housing slowdown. He said cheaper financing shouldn’t be viewed in a vacuum.
“The lower interest rates are there for a reason,” he said, referring to rates cuts the Federal Reserve has undertaken to bolster the economy.
A UCLA Anderson Forecast, also released Wednesday, doesn’t predict a recession, but rather slowing GDP growth this year and next. Gabriel said that should be enough growth that the housing market doesn’t fall off a cliff, but also doesn’t enter a new boom period.
CoreLogic said a growing share of home sales last month were in the affordable stretches of the Southland -- one reason there wasn’t a rise in the regional median, which is the point where half the homes sold for more and half for less.
- In Los Angeles County, the median price rose 0.7% to $619,000, while sales fell 5.9%.
- In Orange County, the median price fell 1% to $719,500; sales fell 3%.
- In Riverside County, the median price rose 2.6% to $390,000; sales rose 6.7%.
- In San Bernardino County, the median price rose 5.3% to $346,000; sales fell 2.5%.
- In San Diego County, the median price fell 0.1% to $584,000; sales rose 1.9%.
- In Ventura County, the median price rose 2.1% to $599,000; sales rose 4.2%.
After years of sharp increases, the high cost of housing, both for buyers and renters, has become a major political issue in Sacramento and other urban centers across the county as homelessness has risen and those with homes struggle with burdensome rents and mortgages.
A high-profile California bill that would have allowed fourplexes in single-family zones failed earlier this year. This month, the Legislature passed a bill that would cap rent increases on many properties at 5%, plus inflation.