The real estate market is constantly evolving and changing with time. Keeping track of market trends and forecasts can be beneficial for both buyers and sellers. In this blog post, we will analyze the recent housing data in Southern California for April 2023. Home prices & sales are moderating across the Southern California housing market.
Southern California Median Sold Price of Existing Single-Family Homes:
Here's April 2023 home sales and price report by C.A.R. to analyze the median sold prices and sales figures for existing single-family homes across different regions and counties in Southern California. Let's take a closer look at the numbers.
Median Sold Price of Existing Single-Family Homes
The median sold price is a crucial metric that reflects the midpoint value of all homes sold during a given period. It provides valuable insights into the overall pricing trends and market conditions. Here are the median sold prices for April 2023 compared to the previous month and the same period last year.
April 2023: $785,000
March 2023: $770,000
April 2022: $837,000
The median sold price for existing single-family homes in Southern California experienced a modest month-to-month increase of 1.9%, reaching $785,000. However, when compared to April 2022, there has been a decline of 6.2%.
April 2023: $738,520
March 2023: $718,370
April 2022: $801,680
In Los Angeles, the median sold price rose by 2.8% from the previous month, reaching $738,520. However, compared to the same period last year, there has been a decline of 7.9%.
April 2023: $1,225,000
March 2023: $1,250,000
April 2022: $1,325,000
The median sold price in Orange County experienced a slight decline of 2.0% from the previous month, amounting to $1,225,000. When compared to April 2022, the decrease stands at 7.5%.
April 2023: $615,000
March 2023: $612,000
April 2022: $630,000
Riverside County saw a marginal month-to-month increase of 0.5% in the median sold price, reaching $615,000. However, compared to April 2022, there has been a decline of 2.4%.
April 2023: $450,000
March 2023: $475,000
April 2022: $495,000
In San Bernardino County, the median sold price decreased by 5.3% from the previous month, amounting to $450,000. When compared to April 2022, the decline stands at 9.1%.
April 2023: $930,000
March 2023: $915,000
April 2022: $975,000
San Diego County experienced a month-to-month increase of 1.6% in the median sold price, reaching $930,000. However, compared to April 2022, there has been a decline of 4.6%.
April 2023: $885,500
March 2023: $849,000
April 2022: $955,000
Ventura County witnessed a notable month-to-month increase of 4.3% in the median sold price, amounting to $885,500. However, compared to April 2022, there has been a decline of 7.3%.
Analyzing the sales figures provides valuable insights into the level of activity and demand within the Southern California housing market. Let's examine the sales figures for April 2023 compared to the previous month and the same period last year.
In April 2023, Southern California experienced a significant month-to-month decrease in home sales, with a decline of 7.8%. When compared to April 2022, there has been a substantial drop of 37.4% in sales activity.
Similarly, Los Angeles witnessed a decline in home sales in April 2023. Compared to the previous month, there was an 8.0% decrease, and compared to April 2022, the decline stood at 37.6%.
Orange County experienced a notable decline in home sales during April 2023. The month-to-month decrease was 10.1%, and the year-over-year decline reached 39.7%.
Riverside County saw a moderate month-to-month decrease of 6.6% in home sales for April 2023. When compared to April 2022, there has been a decline of 35.5%.
In San Bernardino County, home sales decreased by 6.8% in April 2023 compared to the previous month. When compared to April 2022, the decline stands at 37.9%.
San Diego County also experienced a decrease in home sales during April 2023, with a month-to-month decline of 8.2%. Compared to April 2022, there has been a drop of 36.9%.
Ventura County witnessed a modest month-to-month decrease of 4.7% in home sales for April 2023. When compared to April 2022, the decline stands at 37.4%.
The above April 2023 housing market report for Southern California reveals a mixed picture. While there were modest month-to-month increases in median sold prices in some regions like Los Angeles and San Diego, the overall trend shows a decline in prices when compared to the same period last year. Additionally, home sales have experienced significant decreases across all regions, indicating a slowdown in the market.
These findings suggest that the Southern California housing market may be facing challenges in terms of affordability and demand. The decline in median sold prices compared to the previous year indicates a potential cooling of the market and a shift in the balance between buyers and sellers. This could be attributed to various factors such as rising interest rates, changes in buyer preferences, and economic conditions. The decrease in sales figures further emphasizes the reduced demand and a more cautious approach from potential homebuyers.
For buyers, this market condition may present opportunities for more negotiating power and potentially lower prices. However, it's crucial for them to carefully assess their financial situation and ensure affordability before making any purchasing decisions. Conducting thorough market research and working closely with a trusted real estate agent can help buyers navigate the changing landscape.
On the other hand, sellers may face increased competition as the market slows down. Pricing their properties competitively and highlighting unique features and benefits can help attract potential buyers in a more cautious market. Patience and flexibility may be necessary as sellers may need to adjust their expectations and be open to negotiations. their strategies to navigate the evolving market conditions effectively.
ALSO READ: California Housing Market Forecast 2023: Will Price Drop?
Southern California Housing Market Forecast 2023-2024
The housing market in the United States, and notably in Southern California, has been impacted as a direct result of rising mortgage rates. As a result of falling sales and rising inventory, a growing number of potential buyers and sellers are pondering whether or not home prices will fall in 2023. According to some experts, both national and Southern California prices will fall next year, owing in part to the increasingly expected recession.
As the recession comes closer, some industry analysts feel the scenario is becoming more realistic, and some of them have even modified their predictions to call for price cuts in 2023. These forecasts are a divergence from those made earlier this year when the vast majority of industry professionals were of the opinion that increased mortgage rates would only postpone price appreciation. That is, home prices would proceed to go up but at a more gradual pace compared to those seen in the preceding two years in Southern California.
A significant number of industry professionals maintain the view that a scenario involving slower development is the one that is most likely to occur. There are very few well-known analysts who anticipate price declines on par with those that were seen during the Great Recession if any at all. However, the rapidity with which the housing market is transforming is shown by the fact that a number of prominent analysts have already predicted that prices will fall in the Southern California real estate market, which is something that has not occurred for more than a decade.
Home prices are going to fall in California, according to Jordan Levine, chief economist for the California Association of Realtors. In response to falling demand, an increasing number of home sellers have reduced the prices at which their houses are placed for sale. If overall sales prices are to fall in the future, this is the first step that must be taken. Levine anticipates the California median sales price to rise 9.7% year on year in 2022, a substantial decrease from the over 20% growth projected in 2021.
Then in 2023, he expects the Federal Reserve’s actions to fight inflation will cause a mild recession, and the combination of job losses and higher rates will cause the statewide median price to fall 7.1% compared with this year, with similar declines in Southern California housing market specifically. Southern California home prices will either decline or should be largely flat over the next few years.
The job recovery trend is good, and the prospect of resuming all jobs lost due to the pandemic is becoming more tangible. Despite greater inventory levels and rising borrowing costs, the Southern California housing market is nevertheless operating strongly. However, the frenzied rate of activity during the last 18 months or so will reduce, but not to an alarming degree. The market remains favorable to house sellers, and they remain in control.
Will Home Prices Drop in Southern California Housing Market?
The following analysis of select counties of the Southern California real estate market for Q4 2022 is provided by Windermere Real Estate Chief Economist Matthew Gardner.
The Southern California real estate market has seen a slowdown in employment growth, with only 33,400 jobs added over the past three months. This is in contrast to the 347,700 jobs added between September 2021 and September 2022. Total employment in the region is still 305,300 below the pre-pandemic peak. The unemployment rate in the region in November was 4%, with the lowest rates in Orange County (3%) and San Diego County (3.3%).
In Q4 2022, 28,953 homes were sold in Southern California, which is 43.9% lower than the same period in the previous year and down 24.5% compared to Q3 2022. Pending home sales, which are an indicator of future closings, were down 30% from Q3, indicating that sales activity in Q1 2023 may also be down. Sales fell the most in Riverside County, with all markets experiencing significant pullbacks. The lower number of sales can be attributed to more listings in the market, which were up 83.5% year over year, and higher mortgage rates, which make homes less affordable.
Fourth-quarter home sale prices were 0.7% higher than the same period in the previous year but were 2.5% lower than in Q3 2022. Mortgage rates, which peaked in October, have impacted both the number of sales and prices. Median listing prices were down 4.9%, indicating that sellers have been adjusting their expectations, but they are expected to fall further before stability in the market is restored. Mortgage rates have started to pull back, and if this continues, the second half of 2023 is expected to be more active, resulting in rising sales and home prices.
Mortgage rates are primarily based on the prices and yields of bonds, and while bonds take cues from several places, they are always impacted by inflation and the economy at large. If inflation continues to fall, rates will continue to drop, and it is forecasted that mortgage rates will trend lower as we move through the year. However, rates will still be higher than what homebuyers have become accustomed to. Even as the cost of borrowing falls, home prices in expensive markets will probably fall a bit more to compensate for rates that will likely hold above 6% until early summer.
In Q4 2022, the average time it took to sell a home in the region was 37 days, which was 15 more than the same period the previous year and 11 more than in Q3 2022. Market time rose in all counties compared to Q3 2022, with homes in San Diego County continuing to sell at a faster rate than other markets in the region. However, more choices and higher mortgage rates appear to be sidelining some buyers. Whether they resume their search for a home in the spring may depend on the direction of mortgage rates and whether prices start to stabilize.
In conclusion, the Southern California real estate market has seen a slowdown in employment growth and a decline in home sales and prices in Q4 2022. However, there are indications that the second half of 2023 will be more active, resulting in rising sales and home prices. Mortgage rates are expected to trend lower as we move through the year, but rates will still be higher than what homebuyers have become accustomed to, and home prices in expensive markets will likely fall a bit more to compensate for the higher rates. It remains to be seen whether buyers will resume their search for a home in the spring, depending on the direction of mortgage rates and whether prices start to stabilize.
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