Prices Stay Flat In Southern California Housing Market
According to a recent article in the Los Angeles Times, the median home prices have stayed flat for the third straight month in Southern California housing market, at $382,000. “The September data confirmed expert predictions that waning demand would throw a wet blanket over the white-hot market. The stall is owed to multiple factors: buyer fatigue over skyrocketing prices, higher mortgage rates, an expanding supply of homes and a pullback by investors who had swarmed the Southern California housing market.”
This cooling has suppressed fears that another housing bubble was on the horizon. Instead, a bit of normalcy in the market is being predicted. “The California Assn. of Realtors predicts that year-over-year price increases will return to 6% next year, more in line with historical norms.”
In June of this year, the market showed a 28% year-over-year increase in the median price of homes. Sellers had a steep advantage as their homes were being sold for above asking price with bidding wars not uncommon. While the demand was high and the supply low, it was not surprising that double-digit price hikes were abundant.
Now, the Southern California housing market is seeing a different kind of trend – more particular buyers. “But sellers listing their homes now are finding a different, more empowered, class of buyers.”
Another reason for the Southern California housing market slowdown? Historically, buyer demand decreases in the fall as families don’t wish to move with children back at school and the holiday season approaching. But experts believe that larger market forces are the cause for decline in demand.
“The housing recovery started last year and kicked into overdrive this year as traditional home buyers and investors — including well-heeled Wall Street firms — rushed into the market, eyeing rock-bottom interest rates and beaten-down home prices. Convinced that the housing crash had finally bottomed out, buyers rushed in. Some even placed bids on houses without touring the homes, agents say — an act of desperation as families battled with all-cash investors amid a historic shortage of homes.
Now prices and mortgage rates have climbed to the point where many buyers have checked out.
Sellers tempted by this year’s price appreciation are increasingly testing the market at the same time that demand is waning. That has caused some sellers to reduce their asking prices — a dose of reality, agents say.
Buyers are also demanding more repairs from sellers — and getting them.”
For the time being it’s still a seller’s market, but not as crazy. For now, we’re in the most “normal” Southern California housing market we have seen in over a decade.