It seems that the overly tight and competitive housing market is finally catching up to buyers in Southern California cities like Los Angeles, San Diego, and San Bernardino. Sales of new and existing homes dropped more than 10% year-over-year while home prices continued to push upward.
The decrease of home sales alone isn’t enough to cause worry, but when combined with the continued growth in home prices, sets off some warning sirens. Going back to 1988, home sales have shown an average 6% monthly growth from May to June. This year’s 1.1% monthly decrease in sales is far from average.
- Southern California home sales plummeted as home prices continued to rise in June
- - Sales of newly built homes were especially weak, posting numbers about 47% below the June Average
- It is becoming increasingly clear that SoCal buyers simply can’t afford the ever-rising home prices
Southern California home sales hit the brakes in June, falling to the lowest reading for the month in four years. Sales of both new and existing houses and condominiums dropped 11.8 percent year over year, as prices shot up to a record high, according to CoreLogic. The report covers Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties.
The weakness was especially apparent in sales of newly built homes, which were 47 percent below the June average. Part of that is that builders are putting up fewer homes, so there is simply less to sell.
“Affordability and inventory constraints are likely the main culprits in last month’s sales slowdown, which applied to all six of the region’s counties and across most of the major price categories,” noted Andrew LePage, a CoreLogic analyst.
Fewer affordable homes
The median price paid for all Southern California homes sold in June was a record $536,250, according to CoreLogic, a 7.3 percent increase compared with June 2017. While part of that is due to a mix shift, since there are fewer lower-priced homes for sale, it is becoming increasingly clear that fewer buyers are able to play in the higher price ranges.
View the original article at CNBC