Southern California’s spring home buying season is underway, with busy open houses, bidding wars and rising prices.
But high mortgage rates and a lack of listings — twin ills that have plagued the market for the past two years — continue to keep a lid on home sales.
The median price of a Southern California home — or the price at the midpoint of all sales — jumped to $740,000 in February, up $35,000 from January, real estate data firm CoreLogic reported Friday, March 29.
February’s average was tied with July for the third-highest median price on record, CoreLogic figures show.
It also was up $55,000, or 8%, from February 2023.
In Orange County, the median was up 17% year over year to an all-time high of $1.11 million.
Prices were up 4-5% in the Inland Empire and were up 10-11% in Los Angeles, San Diego and Ventura counties.
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Sales also increased in February, climbing 12% to 12,430 transactions.
But transactions still were 27% below the average for the month, stymied by the lack of affordability and too few listings.
Even with that year-over-year increase, February remained the eighth-slowest month in records dating back 36 years.
Transactions have been below the February average for two consecutive years, making it hard for agents, lenders, home inspectors and others who rely on volume for their income.
“I had a way better year in 2021 than in 2022 and 2023,” said Ignacio Ramirez, an agent with Klovus Realty in Pasadena. “Some of the agents … are going back looking for work because they can’t sustain not having the income.”
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With 30-year mortgage rates still averaging just under 7%, there are fewer buyers able to afford a typical house payment of $3,852 a month.
In addition to weeding out buyers, high interest rates also are discouraging homeowners from listing their properties for sale.
“People that have low-interest loans have an asset now, and they’re not going to get away from it,” said broker Al Ricci of Orange. “They’re loan frozen. That’s why we’re not getting the inventory.”
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The six-county region had 39,248 active listings in February, the lowest number for that month since at least 2011, according to data from online brokerage firm Redfin. Listings were 33% below the average for a February.
With so many homeowners “locked in” to their current mortgage, transactions are limited to people who have to sell, or the “four D’s,” said Ricci: death, divorce, debt and diapers.
Because of the low inventory, there still are fewer listings than home seekers, keeping competition and prices high, agents said.
Homes “are selling incredibly fast,” Cypress agent Angie Santo said at a recent open house for a two-bedroom condo in Bellflower.
“I have three offers and will probably have 10 by tomorrow,” Santo said. Three days later, the Bellflower condo was under contract.
Santo said another listing in Tustin sold for $55,000 over the asking price after getting 15 offers.
Ricci said 100 people showed up for an open house for a Villa Park home selling for $1.2 million. Typically, Ricci’s team sees 30 to 40 people show up for an open house in that high-end city.
“People are out there looking, and people are out there making offers. So, for the houses that are on the market, good for them,” Ricci said. “We just don’t have the volume of inventory to sell. And the scarcity of inventory is hurting the market when sales prices just keep climbing.”
Here is a county-by-county breakdown of median home prices and sales, with annual percentage changes:
— Los Angeles County’s median rose 10.5% to $845,000; sales were up 10.7% to 3,746 transactions.
— Orange County’s median rose 16.8% to a record high of $1.11; sales were up 21.2% to 1,775 transactions.
— Riverside County’s median rose 5.1% to $567,500; sales were up 10.3% to 2,576 transactions.
— San Bernardino County’s median rose 4.3% to $490,000; sales were up 13.6% to 1,767 transactions.
— San Diego County’s median rose 10% to $825,000; sales were up 9.9% to 2,132 transactions.
— Ventura County’s median rose 11.3% to $823,500; sales were up 11.0% to 434 transactions.
