Southern California home sales hit a four-year low this past summer as rising costs and a lack of affordable homes cut into home shoppers' buying power, real estate data firm CoreLogic reported.
August's sales tally of 22,261 transactions was down for the ninth time in the past 12 months, a sign that home buyers increasingly are being priced out of the market, analysts said.
But the region's median home price — or price at the midpoint of all sales — hit $535,000, just shy of the $537,000 record price reached in June, CoreLogic reported. Last month's median was up 7% year-over-year, marking the 77th consecutive month in which Southern California saw annual price gains.
In San Diego County, the median hit a record high of $583,000 last month, and Los Angeles County's median price of $615,000 tied the record set in June.
Those high home prices, coupled with higher mortgage interest rates, have boosted the monthly house payment on a median-priced home 16% from a year ago, reported CoreLogic Analyst Andrew LePage.
"Home sales downshifted significantly this summer," LePage said. "Lack of affordable inventory is one of the main culprits of this summer's slowdown."
Sales for the June-through-August period fell 6.8% in the past 12 months, making the summer of 2018 the slowest since 2014.
August transactions were down from year-ago levels in all six Southern California counties. Orange County, the region's priciest housing market, had the biggest decline. Transactions there were off 10.9%, followed by an 8.9% drop in San Diego County and an 8.5% decrease in Los Angeles County.
Home listings ballooned as sales slowed. Southern California had 45,187 homes for sale as of Sept. 20, the highest number of listings in three years, according to Reports On Housing.
As listings continue to mount, the 2019 housing market is shaping up to start the year with more homes and more seller competition, Reports On Housing author Steve Thomas said this week.
"The number of listings is starting to increase, but the buyers are not there," said Newport Beach mortgage banker Kevin Budde. "Everyone's feeling the pain and looking for reasons why."
There are several reasons, Budde said, including higher mortgage rates, reduced tax write-offs under the 2017 federal tax plan and higher home prices. For example, the 30-year mortgage rate averaged 4.72% last week, up 0.8 of a percentage point from a year ago. That added about $205 to the typical monthly mortgage payment.
"All of this adds up. It adds up to slower home sales and people (not) being able to buy a home," he said. "Affordability is probably the biggest factor of all."
Median prices for resale condos — typically an entry-level home — remained above the half-million-dollar mark in both Los Angeles and Orange counties.
A mere 2.5 years ago, a buyer could buy a house in L.A. County for the same amount.
Resale houses now cost, on average, $555,000 in Southern California as a whole, but command $646,500 in Los Angeles County and $780,000 in Orange County.
The Inland Empire remains the region's most affordable market. Buyers paid between $315,000 and $380,000 for the median-priced house in San Bernardino and Riverside counties last month, with median-priced condos selling in the $275,000 to $310,000 range.
Even at those prices, inland sales were down by more than 6.5% in both Riverside and San Bernardino counties, CoreLogic figures show.
