As summer was heating up, so was the California real estate market. Now that we’re heading into fall, parts of Southern California are experience a cool down in their respective housing markets. Real estate data firm CoreLogic has released their latest report confirming this trend.
Overall, Southern California’s housing market continued its upward climb in August, with both home prices and sales rising compared to a year earlier. Despite slowing price appreciation, sales continue to gain momentum. Across the six-county Southland, sales climbed 8% and home prices climbed 4.3% to a median of $438,000 from August 2014.
In Orange County, the housing market has coasted into a slowdown. Although the median price of an Orange County home was up to the highest price for an August in eight years at $610,000, prices have retreated 3% over the past two months. Meanwhile, sales were up 3.4% year-over-year, but down 14% from July.
In the Inland market, sales were down in August from July, but specific counties reported year-over-year gains. Home sales were up 8.9% in Riverside County and 13.6% in San Bernardino County from August 2014. Inland Southern California has long been considered the most affordable area compared with Los Angeles, Orange, San Diego and Ventura counties and has seen an increase in median sale prices as well. Median sale prices rose 5.4% in Riverside County and 12.5% in San Bernardino County from August last year. Because of the area’s affordability compared to other California counties, this may account for the concentrated rise in home sales and in turn, the rise in prices.
“Southern California home sales downshifted” in August, said CoreLogic Research Analyst Andrew LePage. “The sales slowdown between July and August occurred among all home-type categories, counties and price ranges. This month-to-month sales decline could be a reflection of a tightening of inventory of homes for sale or the impact rising prices have had on affordability.”
Economists have welcomed the slowdown in price appreciation from the double-digit rates of recent years. The more moderate gains indicate a housing market that’s normalizing after years of drastic swings. Additionally, an improving economy has given more families the confidence to make what is often the biggest purchase of their lifetimes.
Although affordability continues to be an issue for most families and inventory remains scarce, do you think the housing market is beginning to “normalize?” As some families are outpriced of the neighborhoods they want to raise their children in and others are being forced out of their long-time residences, how long will it take for things to become normal again? Let us know your thoughts and insight.
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