October has long been seen as a turning point in the year, when the market begins to slow as we make the transition into cooler months. It’s expected at this time that home prices and sales will begin to dip, and this October was no exception. Despite the gains made in September, a recent study has found that both sales dropped and price gains slowed across Southern California in the month of October.
According to a new study from San Diego-based research firm DataQuick, sales of new and previously owned homes dropped by 4.4% across Southern California in October, 879 fewer than the same time one year before and 17.7% lower than the 25 year average for the month.
The recent drop hit hardest in San Bernardino, where sales declined 6.8% from the year before. In San Diego, Riverside, Orange County and Los Angeles sales dropped by 5.7%, 4.9%, 4.6% and 3.3% respectively.
Ventura County was the only market which saw a yearly gain. Sales here increased by 2.6% year-over-year.
The study also found that the median price for homes sold across the six-counties rose to $410,000 in October, an increase of 6.8% from the year prior but the smallest gain year-over-year since June of 2012. Month-over-month, the median price throughout SoCal dropped by 0.7%.
Some markets fared better than others though. In Orange County, the median home price increased by 10.2% from the year before and up $10,000 from September, the first double-digit gain in four months, and the highest median price for October since 2006.
However, the recent lull should not be a major concern – at least not yet. Since the run-ups of 2013, the market has been in a phase of recovery, so many experts believe that this recent slowdown is just that – a sign of a strengthening market.
“We’ve yet to see traditional buyers fill the void left by the drop-off in investor and cash buyers, which began in spring last year,” said Andrew LePage, data analyst for CoreLogic DataQuick. “The resale market is hampered by constrained inventory in many areas, in part because some people who want to put their homes up for sale still haven’t regained enough equity to purchase their next home. Then there are the would-be buyers who continue to struggle with affordability and mortgage availability, if not uncertainty over their employment or the direction of the housing market.”
Do you agree that the recent drop in sales is a sign of a recovering market? What are your thoughts?