Housing tracker: SoCal home price growth shows signs of slowing

Southern California home prices dipped ever so slightly in August, a signal that a more normal market could be around the corner.

The average home price in the six-county region was $867,524 last month, down 0.35% from an all-time high in July, according to data from Zillow.

The slight dip does not mean home prices are going to keep falling. It’s not uncommon for home prices to fluctuate month to month, or dip starting in the late summer due to seasonal patterns. Home prices are still nearly 6% higher than a year earlier in August 2023.

That said the rate of home price growth is slowing, something many economists expected to happen given the mismatch between incomes and prices.

Home price growth peaked at nearly 9.5% in April and has declined every month since.

Helping to moderate price growth is a housing shortage that, while not going away, is getting slightly less bad.

In recent months, the number of homes listed for sale has steadily grown. Real estate agents say home owners who once balked at giving up their ultra low mortgage rates from the pandemic and prior are increasingly choosing to move, deciding a larger home is more important than low borrowing costs.

In August, the number of homes on the market had risen in all six counties over the prior year, ranging from a 24% gain in Orange County to 46% in San Diego County. In Los Angeles County, inventory climbed 31%.

Prospective buyers have received some additional good news lately. This week, mortgage rates dropped to their lowest level in more than a year, hitting 6.2%, according to Freddie Mac. A week earlier, rates averaged 6.35% and were above 7% in May.

The drop immediately makes homes more affordable, but rates are still more than double what they were during much of the pandemic. Home prices are much higher as well.

Some experts don’t expect home prices to decline in the near future unless there’s a recession. That’s because while inventory is improving, it’s still low historically. Prices, however, should climb more slowly, or remain relatively flat, giving incomes a chance to catch up.

Explore home prices and rents for August

Use the tables below to search for home sale prices and apartment rental prices by city, neighborhood and county.

Rental prices in Southern California

In the last year, asking rents for apartments in many parts of Southern California have ticked down.

Experts say the trend is driven by a rising number of vacancies, which have forced some landlords to accept less in rent. Vacancies have risen because apartment supply is expanding and demand has fallen as consumers worry about the economy and inflation.

Additionally, the large millennial generation is increasingly aging into homeownership, as the smaller Generation Z enters the apartment market.

Prospective renters shouldn’t get too excited, however. Rent is still extremely high.

In August, the median rent for vacant units of all sizes across Los Angeles County was $2,088, down 1.3% from a year earlier but nearly 9% more than in August 2019, according to data from Apartment List.