The Southern California housing market is a hot topic. Known for its beautiful beaches, year-round sunshine, and vibrant cities, Southern California has always been a desirable place to live. Are you thinking about buying or selling a home in Southern California? If so, you're probably wondering about the current Southern California housing market trends.
Here's the bottom line: As of December 2024, the market shows signs of strength with increasing home sales and rising median prices compared to the previous year, although inventory remains a key factor to watch. Let's dive deeper into what's happening and what it means for you.
Current Southern California Housing Market Trends: A Comprehensive Overview
Home Sales in Southern California
One of the most significant indicators of market health is the volume of home sales. According to the California Association of Realtors (CAR), Southern California saw a notable increase in home sales in December 2024.
- Sales in Southern California increased by 16.3% year-over-year.
- Month over month, sales increased by 8.1%.
- Orange County saw a 20.7% increase
- San Diego County experienced a whopping 27% increase in sales compared to December of the previous year.
This suggests a higher demand for homes in the region. It can be attributed to a number of factors, including lower interest rates compared to the peak we saw earlier in the year, and pent-up demand from buyers who were waiting on the sidelines. Also there is an increase in consumer confidence that leads to more transactions.
Home Prices in Southern California
Of course, everyone wants to know about home prices. Are they going up, down, or staying the same? Here's a look at the median sold prices of existing single-family homes in Southern California:
- The median sold price in Southern California in December 2024 was $850,000.
- This represents a 7.6% increase compared to December 2023.
- Imperial County saw the biggest increase in price at 21.0%
- Los Angeles County saw an increase of 6.9%
- Orange County prices rose by 4.8% to $1,362,000
Are Home Prices Dropping?
While some areas have experienced slight month-to-month fluctuations, the overall trend indicates that home prices in Southern California are not dropping significantly. In fact, they're generally trending upwards year-over-year. However, it's essential to look at specific neighborhoods because the real estate market is very hyper local.
Here's a table summarizing the median sold prices:
County | Dec 2024 | Dec 2023 | YTY % Change |
---|---|---|---|
Imperial | $381,000 | $315,000 | 21.0% |
Los Angeles | $912,370 | $853,340 | 6.9% |
Orange | $1,362,000 | $1,300,000 | 4.8% |
Riverside | $624,790 | $605,000 | 3.3% |
San Bernardino | $490,950 | $475,000 | 3.4% |
San Diego | $975,000 | $911,500 | 7.0% |
Ventura | $895,000 | $882,500 | 1.4% |
Southern CA | $850,000 | $790,000 | 7.6% |
Housing Supply in Southern California
Inventory, or the number of homes available for sale, is a crucial factor influencing the market. A low inventory can drive up prices as buyers compete for fewer properties.
- The Unsold Inventory Index (UII) for Southern California in December 2024 was 2.8. This compares to 3.5 the previous month, and 2.6 the previous year.
- This means that, at the current sales pace, it would take approximately 2.8 months to sell all the homes currently on the market.
What does this mean?
- A UII of around 6 months is generally considered a balanced market. Southern California's UII is well below that, indicating that we're still leaning towards a seller's market, but not by much.
- However, there is an increase in inventory over last year's numbers.
Here is a table to illustrate supply metrics:
County | Dec-24 UII | Nov-24 UII | Dec-23 UII |
---|---|---|---|
Imperial | 2.9 | 3.8 | 0.0 |
Los Angeles | 2.7 | 3.5 | 2.6 |
Orange | 2.1 | 2.7 | 2.0 |
Riverside | 3.6 | 4.5 | 3.2 |
San Bernardino | 3.9 | 4.8 | 3.4 |
San Diego | 2.3 | 2.9 | 2.2 |
Ventura | 2.3 | 2.9 | 2.4 |
Southern CA | 2.8 | 3.5 | 2.6 |
Median Time on Market
Homes are selling at a faster pace in some regions. I believe Median Time on Market is a very reliable indicator and closely correlated with demand.
County | Dec-24 | Nov-24 | Dec-23 |
---|---|---|---|
Imperial | 22.5 | 16.5 | 21.5 |
Los Angeles | 29.0 | 26.0 | 23.0 |
Orange | 31.0 | 27.0 | 24.0 |
Riverside | 41.0 | 38.0 | 35.0 |
San Bernardino | 39.5 | 38.0 | 35.0 |
San Diego | 24.0 | 20.0 | 18.0 |
Ventura | 44.0 | 38.0 | 37.0 |
Current Market Trends in Southern California
So, what are the overall market trends shaping the Southern California housing market right now? Here are a few key observations:
- Rising Sales and Prices: As noted above, both sales and prices are generally trending upwards compared to last year. This is a good sign for homeowners.
- Relatively Low Inventory: While inventory has increased somewhat, it's still below what's considered a balanced market. This continues to put some upward pressure on prices.
- Time on Market Increasing: Across the entire area, time on market increased slightly to 31.5 days in December 2024, compared to 28.0 in November 2024, and 26.0 in December 2023.
- Impact of External Factors: Broader economic conditions, such as interest rates and inflation, can significantly influence the housing market.
- Regional Variations: It's important to remember that real estate is local. Trends can vary significantly from one city or neighborhood to another.
Is It a Buyer's or Seller's Housing Market in Southern California?
Given the factors discussed above, Southern California's housing market is arguably leaning toward a seller's market, but it's not as strong as it was a year or two ago. Low inventory and rising sales and prices give sellers an advantage, but buyers have slightly more negotiating power than they did during the peak of the market frenzy.
I have seen bidding wars have become less common, and homes are staying on the market a bit longer. However, well-priced homes in desirable locations are still selling relatively quickly.
Impact of Recent Fires on the Housing Market
The recent Hughes Fire and other wildfires have a multi-faceted impact on the Southern California housing market. The fires have caused displacement and property damage, reduced housing inventory in affected areas, and increased insurance costs for homeowners due to higher perceived risk.
Additionally, air quality warnings have highlighted environmental concerns, potentially making some buyers hesitant about purchasing homes in fire-prone regions. I anticipate the Hughes fire and other fires in 2025 will influence buying decisions and neighborhood preferences, particularly in areas with a higher risk of future wildfires.
My Thoughts on Current Trends
In my experience, navigating the Southern California housing market requires a strategic approach. It's not enough to just look at the broad statistics. Here's my advice:
- Work with a Local Expert: A knowledgeable real estate agent can provide invaluable insights into specific neighborhoods and market conditions.
- Get Pre-Approved: If you're a buyer, getting pre-approved for a mortgage will strengthen your offer and show sellers that you're a serious contender.
- Be Prepared to Act Quickly: While the market has cooled somewhat, desirable properties can still generate a lot of interest. Be ready to make a competitive offer if you find the right home.
- Focus on Your Needs: Don't get caught up in the hype. Focus on finding a home that meets your needs and budget.
- Have a Longer Term View: Don't try to time the market. Home ownership is a long-term investment. Look for a property that will suit your needs for the next 5-10 years.
Also, keep in mind the recent fires such as the Hughes Fire that are affecting Southern California. These types of natural events can affect housing prices. Be sure to work with an expert who can guide you accordingly.
Southern California Housing Market Forecast 2024-2025
Looking ahead, I believe that the Southern California housing market will continue to be a competitive environment for buyers, but with some opportunities.
- I expect home price appreciation to slow further in 2025, with growth rates potentially declining to the 2-4% range.
- The housing supply is expected to increase gradually, offering more choices to buyers.
- Interest rates will likely remain elevated, but their impact on the market is expected to lessen as people adjust to the new norm.
- Demand for housing in Southern California will likely remain strong, driven by population growth and the desirability of the region.
My overall forecast is for a more balanced market in 2025. While it will still be a seller's market in many areas, buyers will have slightly more leverage.
In my experience, this market is more sensitive to changes in interest rates than some others. As interest rates stabilize or potentially decline, we could see renewed buyer confidence and a pickup in activity. I also feel that areas with a higher concentration of jobs, including those around the tech and entertainment sectors, are likely to remain robust compared to some of the more rural parts of Southern California.
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