Southern California Housing Market Data
Are we starting to see the early signs of a housing market slow down in Southern California? In this video we look at what happened to buyer demand (pending sales) and the total number of homes for sale in Orange County, Los Angeles County, Riverside County, and San Bernardino County. During the week 3/13 – 3/19, the number of pending sales decreased substantially in some of the major Southern California counties. Some counties experienced over a 20% drop compared to the prior week.
I want it to be clear that the housing market is still in an extremely HOT seller’s market. Plenty of homes are still selling extremely quickly, receiving multiple offers, and selling above the asking price. The market has a long ways to go before we get back to a balanced housing market. On a monthly basis, the number of pending sales is still well above the total number of homes for sale. This has been the case since early 2021, and it is indicative of an extremely HOT seller’s market.
If pending sales continues to drop while supply increases we could see a noticeable difference in the housing market. However, if buyer demand resumes its upward trend, the housing market could continue at a similar pace.
We also discuss potential reasons on why buyer demand is dropping. The primary reason is most likely mortgage rates. Sometimes a rise in mortgage rates causes a short-term boost for buyer demand. In the long run, higher interest rates typically has a negative effect on buyer demand. We could be seeing the end in the short term boost as mortgage rates continue to rise.
Below are a few interesting charts related to housing market values:
Stocks vs. Home Values: https://www.longtermtrends.net/stocks-to-real-estate-ratio/
Home Values vs. Median Income: https://www.longtermtrends.net/home-price-median-annual-income-ratio/
Home Values vs. Inflation https://www.longtermtrends.net/home-price-vs-inflation/
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StellarQuest Real Estate – Lic #02077900
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By: Tim Hamilton
Broker Associate
Lic# 01959966
(714) 486-4086
timsellsca@gmail.com