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Southern California’s housing market is on the decline.
The average home price in the six-county area fell 0.3% in November from October to $869,288, the fourth straight month of declines, according to Zillow.
“There’s no sense of urgency from buyers,” said Mark Schlosser, a Los Angeles-area Compass agent. “They’re waiting.”
Prices are currently down 1.3% from July’s all-time high, but some economists say home buyers or those looking to sell shouldn’t expect a steep drop in home values. There is. One of the reasons behind the change is that markets typically slow down in the fall and prices are still above where they were a year ago.
Still, more homes are on the market and mortgage rates remain high, creating a situation where supply increases slightly and demand decreases slightly.
As a result, annual price growth rates have slowed. Southern California home prices rose 4.3% last month compared to the same month a year ago, with a recent peak of 9.5% in April.
Orphe Divounguy, senior economist at Zillow, said he expects annual price growth in Southern California to slow further next year, but not to go negative.
Although more homeowners are choosing to sell their homes, many still don’t want to let go of the ultra-low-interest mortgages they took out during the pandemic.
Devonguy said California also has a long-standing problem of building too few homes for everyone who wants to live here. In some places where construction is progressing, prices have already fallen compared to last year.
Prices in the Austin metro area fell 3.4% in November, according to Zillow.
“I don’t think we’ll see negative prices until inventory catches up, like some of the big cities that have built a lot of housing,” he said.
Locally, Zillow projects that across Orange and Los Angeles counties, home prices will be 1.5% higher in November 2025 than they are now. In the Inland Empire, values should increase by 2.7%
Prices may continue to rise, but rising incomes and falling mortgage rates could make the housing market more affordable for people looking to move in.
Depending on the time frame you look at, that’s already happening to some extent.
Inflation and economic growth play a large role in the direction of mortgage rates. Mortgage interest rates were above 7% in May but steadily declined to 6.08% in September on signs of easing inflation and a weakening economy.
Interest rates have begun to rise again after stronger-than-expected job growth and investor concerns that the incoming Trump administration will introduce sweeping tariffs, tax cuts and other measures that will reignite inflation. .
Mortgage rates reached 6.84% in late November, but have since fallen slightly to 6.6% as of Dec. 12, according to Freddie Mac.
In a statement announcing the latest mortgage rate numbers, Sam Cater, Freddie Mac’s chief economist, said, “While the outlook for the housing market is improving, homebuyers continue to face severe affordability headwinds. Improvements are limited given what they continue to face.”
Housing prices by city and neighborhood
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.
Check house prices and rents in November
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 past 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 November was $2,057, down 1.2% from a year ago but up 7.2% from November 2019, according to Apartment List data.
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