Southern California home prices have been falling. Are the drops over? (2024)

FAQs

Will housing prices in Southern California go down? ›

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.

Last year, rising mortgage interest rates chilled the previously hot Southern California housing market. Buyers backed off, sales plunged and, for the first time in a decade, home prices underwent a sustained slide. By one measure, prices in the six-county region fell 13% from the peak last spring.

They see existing single-family home sales to fall 18.2% to 279,900 units this year vas 342,000 homes sold in 2022. They expect home prices to improve in Q3 & Q4 this year, over in 2023 they expect the medium home will delince 5.6% compared to 2022, to $776,600 in 2023 ($822,300 in 2022).

Homebuyer.com data analysis indicates that, for first-time home buyers, June 2023 is a good time to buy a house relative to later in the year. This article provides an unbiased look at current mortgage rates, housing market conditions, and market sentiment.

Is it a good time to buy a house in the current California market? It's always a good time to buy a house in California, according to the Oldhams. California homes have steadily appreciated over time. Historical data shows the average rate of appreciation in California came in at 6.77% annually over a 39-year period.

UCSD model predicts 12% decline in San Diego home prices by the end of 2023. SAN DIEGO — A study from UC San Diego is predicting there will be a 12% drop in the future of the housing market in San Diego.

Seventy-four percent of voters view housing affordability as a major issue, according to a February survey by the nonpartisan Public Policy Institute of California, and nearly 90% are worried that younger generations won't be able to afford a home in the state.

Housing in California is expensive due to high demand and low supply. With strong demand from millennials and retirees drawn to California's warm climate, the limited supply of housing has driven up property values.

Los Angeles Housing Market Trends

In April 2023, Los Angeles home prices were down 9.76% compared to last year, selling for a median price of $925K. On average, homes in Los Angeles sell after 41 days on the market compared to 31 days last year. There were 1,460 homes sold in April this year, down from 2,386 last year.

Los Angeles is a Sellers Housing Market, which means prices tend to be higher and homes sell faster.

What will my home value be in 2023? ›

The median home price will rise to $385,800, an increase of only 0.3% from this year's level ($384,500), while home sales will fall 6.8% compared to 2022's level (5.13 million).

If you need to be occupying your home by a certain date to save on rent, it's a much better deal to close at the end of the previous month (for example, January 30) instead of the beginning of the current month (February 1).

With mortgage rates declining faster than expected, home prices are likely to remain mostly flat throughout 2024. This will be good news for buyers who have been waiting on the sidelines for a good time to enter the market.

"Possibly in 2024, but it will depend on the Fed's decisions about raising rates in the second half of the year," says Fleming. "And even if they do go down, it won't be back to the rates of yesteryear. 6% mortgage rates used to be normal, and that's more reasonable to expect too."

“We expect that 30-year mortgage rates will end 2023 at 5.2%,” the organization noted in its forecast commentary. It since has walked back its forecast slightly but still sees rates dipping below 6%, to 5.6%, by the end of the year.

This means the best time to sell a home in the Golden State would be around January and March, especially for homes in Los Angeles, San Francisco, or San Diego. In comparison to the rest of the country, the best time to sell a home is typically during the spring, specifically in mid-April, according to Jones.

Winter is usually the cheapest time of year to purchase a home. Sellers are often motivated, which automatically translates into an advantage to you. Most people suspend their listings from around Thanksgiving to the New Year because they assume buyers are scarce.

(The average age for first-time homebuyers is 30-35 years of age, according to the reader poll, above). Members of Gen-Y will likely begin their foray into the housing market following the next recession, expected in 2020.

Median Home Price in San Diego

For buyers, a small but growing timeline of homes for sale in the latter half of 2022 helped to lower prices, with the median sales price falling 1.3% year-over-year in January to $770,000.

There are multiple estimates of the required annual salary to live comfortably in San Diego. The team at Visual Capitalist says you need to earn $166,900 to buy a house in San Diego. This is based on the median home price of $905,000 and other calculations like median down payments and debt-to-income ratios.

Why are home prices dropping in San Diego? ›

The study predicts housing prices will drop by 5% nationally. Timmerman says San Diego's housing prices are dropping more than the national average because it's where the market over heated the most during the pandemic. The study predicts Phoenix and Las Vegas will also see a decline in housing prices.

The Riverside-San Bernardino MSA is ranked as the most overvalued region to rent a home because its rental rates have risen faster than local incomes.

Since about 1970, California has been experiencing an extended and increasing housing shortage, such that by 2018, California ranked 49th among the states of the U.S. in terms of housing units per resident.

Every corner of California is experiencing a real estate market cool down. The number of home sales in nearly every county in the state declined during the last week of March compared with the previous year, according to new data from Redfin.

California continued to lose residents in 2022, but the state's population decline is slowing as immigration ramps up again following the COVID-19 pandemic. The state is currently home to about 38.9 million people, down more than 138,400 year-over-year, according to the California Department of Finance.

Which City Is More Affordable: Los Angeles or New York City? Both NYC and LA are among the most expensive cities in both the U.S. and the world. However, the average cost of living in LA is also 24-27% lower than that of NYC.

Between 1970 and 1980, California home prices went from 30 percent above U.S. levels to more than 80 percent higher. This trend has continued. Today, an average California home costs $440,000, about two–and–a–half times the average national home price ($180,000).

Buyers believe it is not a very good time to buy a home in Los Angeles due to rising mortgage rates and home prices. On the other hand, it is a good time to sell so you can expect more inventory due to increasing seller optimism.

Homeowners owe more on their mortgages than their homes were worth and can no longer just flip their way out of their homes if they cannot make the new, higher payments. Instead, they will lose their homes to foreclosure and often file for bankruptcy in the process.

The market has cooled as rising mortgage rates and a shaky economy scared off house hunters. But it hasn't been an across-the-board drop. In 51 of 84 Orange County ZIP codes, prices have fallen since March 2022. That's 61% of the county.

What should you not do when staging a house? ›

Home sellers are typically responsible for paying the Realtor® commission for both their and the buyer's agents.

California is so expensive because of its strong economy, high-income tax rates, and limited housing supply which make it difficult for residents to save money. Moreover, the prices of basic necessities such as food, gasoline, and transportation are comparatively steep in California as compared to most other US states.

After falling in 2023 and 2024, home prices are predicted to plateau in 2025 before rising again at just above the rate of inflation. However, due to the spike in home values from 2020 through 2022 due to record-low mortgage rates, median sales prices will take at least until 2027 to regain the highs of mid-2022.

In my opinion, real estate is one intelligent option to consider in 2023, as it often has excellent returns, tax advantages and provides diversification even in the face of a challenging economic climate. Real estate also has the potential to compound your investment.

How much will property prices rise in 5 years? Based on historical averages of 3.5% of home value growth per year, property prices will rise a total of about 18 to 20% in 5 years. The math is simple: 3.5% a year for 5 years, compounding annually.

Lower closing costs: Closing later in the month will reduce your closing costs because your upfront interest and taxes will be calculated from the date of closing to the last day of the month, leaving a shorter amount of time for interest and taxes to accrue.

The Average US Home Could be Worth $382,000 by 2030

House prices in the US have risen by 48.55% in the last ten years (from $173k to $257k) and if they continue to grow at this rate for another decade, the average US home will be worth $382k by 2030.

Will 2030 be a good year to buy a house? ›

California is set to have the highest average home next decade, with a predicted price of $1,048,100 by September of 2030, if prices continue to grow at the current rate.

Key Takeaways. The best age to buy is when you can comfortably afford the payments, tackle any unexpected repairs, and live in the home long enough to cover the costs of buying and selling a home. Legally, you must be at least 18 in most states to buy a home.

Mortgage Interest Rate Projected Forecast 2024. According to Longforecast, the 30 Year Mortgage Rate will continue to rise further in 2024. The 30 Year Mortgage Rate forecast at the end of the year is projected to be 13.9%.

Policymakers expect their interest-rate hikes to push the unemployment rate, now at 3.6%, to 4.5% in the last quarter of 2023, and to 4.6% in 2024.

'I believe by the end of 2023 we will see rates start to fall with a target of between 2.5 to 3 per cent in 2024. 'I believe if the base rate can get back to circa 2.5 per cent, then we will see rates hovering around that mark with a return to products that have not been seen in the mortgage industry for some time.'

The Mortgage Bankers Association predicts rates will fall to 5.5 percent by the end of 2023 as the economy weakens. The group revised its forecast upward a bit — it previously expected rates to fall to 5.3 percent.

Homes might be more affordable in 2024, but that doesn't mean you should wait to buy one. With U.S. home prices dropping and mortgage rates projected to dip sometime in 2024, homebuyers might be wondering if they should wait until next year to land a more affordable deal.

Fannie Mae expects the 30-year fixed to ease to around 6.1% in the second quarter of 2023, before falling to 5.9% in the third quarter and 5.7% in Q4. And it gets even better than that. By the end of 2024, they expect the 30-year fixed to average 5.2%.

In 51 of 84 Orange County ZIP codes, prices have fallen since March 2022. That's 61% of the county. And 71 ZIPs saw one-year sales declines or 85% of the county.

Some of housing analysts say that home prices in Los Angeles and Orange counties will fall by the middle single digits in 2023, while home prices in the Inland Empire will fall by the high single digits over the same time period.

Why is California housing prices so high? ›

Housing in California is expensive due to high demand and low supply. With strong demand from millennials and retirees drawn to California's warm climate, the limited supply of housing has driven up property values.

Based on the available data, there is a positive market forecast for the San Diego housing market. The forecast suggests a projected increase of 3.6% in home values over the next year, starting from April 30, 2023.

The cooling trend is also increasing the number of available homes on the market. It is anticipated that home price growth will continue to decline in the coming months, culminating in year-over-year decreases by the fall of 2023.

Demand for Housing in Orange County

Warm climate year-round, including mild winters. Public parks and myriad opportunities for outdoor recreation. Beautiful beaches. Geographic diversity: Beaches, desert, forest.

Orange County, CA Housing Market

In April 2023, the median listing home price in Orange County, CA was $1.2M, trending up 4.6% year-over-year. The median listing home price per square foot was $619. The median home sold price was $965K.

Although home prices are expected to improve in the second half of the year, the California median home price is projected to decrease by 5.6 percent to $776,600 in 2023, down from the median price of $822,300 recorded in 2022.

More and more people are leaving California's urban areas like Los Angeles and moving into less-expensive communities like the Inland Empire - or exiting the state altogether. "The main reason is people are looking for where their money goes a little further than here," Coelho said.

According to the CoreLogic HPI Forecast, home prices are projected to continue their upward trajectory. The forecast indicates an expected month-over-month increase of 0.8% from March 2023 to April 2023 and a year-over-year increase of 4.6% from March 2023 to March 2024.

Median Home Price in San Diego

For buyers, a small but growing timeline of homes for sale in the latter half of 2022 helped to lower prices, with the median sales price falling 1.3% year-over-year in January to $770,000.

Is it a good time to buy a house in San Diego? It's not a horrible time, but with both home prices and mortgage rates coming down, you may save money by waiting until later in 2023.