Home prices in Southern California fell for the third consecutive month in October, but remain near record highs, putting them out of reach for most households.
The average home price in the six-county area was $864,586 last month, down 0.4% from September and 1% below the record set in July, according to Zillow data.
Prices have now fallen for three consecutive months, but that doesn’t mean they will continue to fall. It’s not uncommon for home prices to fluctuate from month to month or begin to decline in late summer and fall due to seasonal patterns. As of October 2023, housing prices are still increasing by nearly 4.5% compared to the previous year.
Still, home price growth has slowed, and many economists expected it to, given the discrepancy between incomes and prices.
Home price growth peaked at nearly 9.5% in April and has declined every month since.
The housing shortage is helping to limit price increases, and although it has not gone away, it is easing somewhat.
The number of homes for sale has been steadily increasing in recent months. Homeowners who were once hesitant to let go of pre-pandemic ultra-low mortgage rates are deciding that a larger home is more important than lower borrowing costs and are choosing to move, real estate agents say. It is said that the number of people is increasing.
The number of homes on the market in October increased year over year in all six counties, ranging from a 25% increase in San Bernardino County to a 49% increase in San Diego County. In Los Angeles County, inventories increased by 33%.
Los Angeles County home prices by city and region
average house price
$750,000 $881,000 $1.32 million
Mortgage interest rates are also a barrier to affordability. Borrowing costs fell over the summer but have been rising since October. Interest rates on popular 30-year fixed mortgages averaged 6.78% as of Nov. 14, up from 6.08% at the end of September, according to Freddie Mac. Experts attribute the rise to a stronger-than-expected economy and policies that former President Donald Trump may implement after taking office.
President Trump has proposed sweeping tariffs and massive tax cuts, which experts say are likely to drive up inflation and the nation’s budget deficit, two of which are typically linked to mortgage debt. This will put upward pressure on interest rates.
Note to readers
Welcome to the Los Angeles Times Real Estate Tracker. We publish monthly reports containing data on house prices, mortgage rates, and rental prices. Our reporters explain what new data means for Los Angeles and the surrounding areas and help you understand how much it costs to buy an apartment or home. You can see last month’s real estate breakdown here.
Some experts don’t expect home prices to fall in the near future unless there is a recession. Although inventories are improving, they are still historically low. But prices will likely rise more slowly or remain relatively flat, giving incomes a chance to catch up.
But Richard Green, director of the USC Rusk Center for Real Estate, cautioned that it’s difficult to say what will happen next because it’s unclear which of President Trump’s proposed policies will become reality.
Check house prices and rents in October
Use the table below to find home sale prices and apartment rental prices by city, neighborhood, and county.
Southern California rental prices
Apartment rent demand has slowed in many parts of Southern California over the last year.
Experts say the trend is being driven by an increase in the number of vacancies, forcing some landlords to accept lower rents. The increase in vacancies comes as the supply of apartments is expanding while demand is decreasing as consumers worry about the economy and inflation.
Additionally, homeownership among large Millennials is becoming increasingly older as smaller Gen Zers enter the apartment market.
Prospective renters don’t need to get too excited, though. Rent is still very high.
The median rent for vacant units of all sizes across Los Angeles County in October was $2,069, down 1.7% from a year ago but up 7.5% compared to October 2019, according to Apartment List data.
