Home prices in Southern California barely rose last month. Becoming a buyer could not bid further on housing costs.
Economists and real estate agents cited a variety of factors that could possibly contribute to the trend, including high mortgage rates, rising inventory, and economic uncertainty caused by some.
According to data from Zillow, average home prices in the six county Southern California area in March increased by 0.38% from a month ago to $875,908. Over the past 12 months, prices have increased by 1.9%, the lowest annual profit since August 2023.
“The housing market is no longer a seller’s market,” said Orphe Divounguy, senior economist at Zillow.
Part of the reason is the seller himself, Divounguy said. Last year, more owners decided that their homes were on the market and that a higher mortgage rate is here to stay, and that it was more important than holding cheap loans they acquired during the pandemic.
At the same time, becoming a buyer was not keen to come back.
Richard Green, director of the USC Lusk Center for Real Estate, said one reason is that mortgage rates remained rising in the 6% range, and if the rate is less than half, they will significantly limit what they can buy compared to the Covid-19 pandemic.
“Only so many people can afford it,” he said.
The weak employment growth in LA County last year has also undermined demand, Green said. Other experts cited the more recent economic phenomenon: the trade war.
As Americans grow, consumer confidence has declined for months.
Los Angeles-area real estate agent Mark Schlosser said he has no clients to stop buying due to economic uncertainty, but he now realizes that the home has been on the market for longer.
“Some people are waiting to see [what happens] Before they continue shopping,” he said.
One big question is whether the economy, a terrifying terrifying experience earlier this month, will enter a recession after President Trump announced the most drastic tariffs ever and stock markets plummeted.
Some of those obligations have since been put on hold, and for now, Zillow predicts that the economy will avoid contraction. However, by March 2026, real estate companies forecast that home prices across the LA-Orange County Metro area will be 2.4% lower than they are now due to increased inventory.
If tariffs and trade wars push the economy into a recession, local home prices could drop even further, Green said.
“If there’s serious tariffs, the economy will really be bad,” Green said. “I’m scared right now.”
City and Neighborhood Home Prices
Beware of readers
Welcome to the Los Angeles Times Real Estate Tracker. Each month we publish a report containing data on home prices, mortgage fees and rental prices. Reporters will explain the meaning of new data in Los Angeles and the surrounding area, and help them understand what they can expect to pay for apartments and homes. You can read the breakdown of last month’s real estate here.
Explore home prices and rents in March
Use the table below to search for home sales and apartment rental prices by city, neighborhood, and county.
Rental prices in Southern California
It has also been etched in many parts of Southern California asking for apartment rentals last year, but a January fire in LA County could reverse the downward trend.
Housing analysts say rising vacancy levels since 2022 have forced landlords to lower rent. However, the fire destroyed thousands of homes and suddenly pushed many people into the rental market.
Most of the destroyed homes are single-family homes, and some housing and disaster recovery experts say the biggest increase in rent for large units adjacent to the Pacific Palisade and Altadena burn areas will reduce upward pressures for units smaller and far away from the disaster zone.
Data from the apartment list shows Santa Monica, adjacent to the Pacific Palisades district of Hardhit, saw a median rent increase of 3.2% in March.
Rent rose only 0.38% last month across the city of Los Angeles, including many areas not adjacent to Palisades and fires.
There is no data for Altadena in the apartment list, but there is data for the adjacent city of Pasadena. Rents rose 4.2% in March.
Source link
