The “Trying Glass” ponders financial and actual property traits by two distinct lenses: the optimist’s “glass half-full” and the pessimist’s “glass half-empty.”
Buzz: California house costs are actually 8.7% beneath Might’s peak.
Supply: My trusty spreadsheet’s evaluate of September’s report on median promoting costs for current, single-family properties by the California Affiliation of Realtors.
Debate: How low will pricing go as mortgage charges soar and demand wanes?
Glass half-empty
California’s median single-family house value fell to $821,680 in September, off 2.1% within the month and down 8.7% from the $900,000 all-time excessive set in Might.
It’s a fast reversal from the pandemic period’s value increase. And consider, the median continues to be up 42% from February 2020 – the final month earlier than the coronavirus upended the economic system.
It’s largely the identical story throughout the state’s main markets as 28 of 51 counties tracked had one-month dips and all however one are beneath their value peaks.
Orange County: $1.2 million median for September is flat vs. August, down 7.3% from Might and nonetheless up 36% from February 2020.
Inland Empire: $562,240 median is off 0.6% within the month, down 5.8% from Might, however up 42% from February 2020.
Bay Space: $1.26 million median is off 0.5% within the month, down 16.5% from Might, however up 38% from February 2020.
Central Coast: $920,000 median is off 3.2% within the month, down 7.5% from Might, however up 29% from February 2020.
Central Valley: $456,000 median is off 0.9% within the month, down 8.8% from Might, however up 34% from February 2020.
Far North: $380,000 median is flat within the month, down 10.6% from Might, however up 27% from February 2020.
Glass half-full
The large outlier was Los Angeles County, the place the median value rose 4.3% to a document $891,770 median. It’s additionally up 11.6% from Might and 54% increased than February 2020.
I’m betting that is extra a statistical quirk than any odd actual property dynamic in L.A. It’s probably the median was pushed up by a shortfall within the variety of lower-priced properties offered.
What’s forward
Skyrocketing mortgage charges together with financial unease and lofty asking costs have prompted California home hunters to rethink what they’re prepared to pay in late summer season. That in all probability received’t change this fall — or for a lot of subsequent yr.
The affiliation predicts a 9% drop within the statewide median for all of 2023. Previously 12 months, this California value benchmark has risen at an 8% common annual charge.
Quotable
“Excessive inflationary pressures will preserve mortgage charges elevated, which can cut back homebuyers’ buying energy and depress housing affordability within the upcoming yr,” says Jordan Levine, the affiliation’s chief economist.
Jonathan Lansner is the enterprise columnist for the Southern California Information Group. He might be reached at jlansner@scng.com