Housing tracker: Southland home price growth shows signs of slowing

Southern California home prices dipped in September, but remain just below their all-time high.

The average home price in the six-county region was $868,919 last month, down 0.3% from August and 0.7% below the record reached in July, according to data from Zillow.

September marks the second straight month prices slipped, but that does not mean home prices are going to keep falling. It’s not uncommon for home prices to fluctuate month to month, or dip starting in the late summer due to seasonal patterns. Home prices are still nearly 5% higher than a year earlier in September 2023.

That said, the rate of home price growth is slowing, something many economists expected to happen given the mismatch between incomes and prices.

Home price growth peaked at nearly 9.5% in April and has declined every month since.

Helping to moderate price growth is a housing shortage that, while not going away, is getting slightly less severe.

In recent months, the number of homes listed for sale has steadily grown. Real estate agents say homeowners who once balked at giving up their ultralow mortgage rates from the pandemic and prior are increasingly choosing to move, deciding a larger home is more important than low borrowing costs.

In September, the number of homes on the market had risen in all six counties over the prior year, ranging from a 25% gain in San Bernardino County to 49% in San Diego County. In Los Angeles County, inventory climbed 34%.

Mortgage interest rates have also come off their recent highs. As of Oct. 17, the average on a 30-year fixed loan was 6.44%, up somewhat from recent weeks, but below the 7% range seen in May, according to Freddie Mac.

The drop from spring immediately makes homes more affordable, but rates are still more than double what they were during much of the pandemic. Home prices are much higher as well.

Some experts don’t expect home prices to decline in the near future unless there’s a recession. That’s because while inventory is improving, it’s still low historically. Prices, however, should climb more slowly, or remain relatively flat, giving incomes a chance to catch up.

Explore home prices and rents for September

Use the tables below to search for home sale prices and apartment rental prices by city, neighborhood and county.

Rental prices in Southern California

In the last year, asking rents for apartments in many parts of Southern California have ticked down.

Experts say the trend is driven by a rising number of vacancies, which have forced some landlords to accept less in rent. Vacancies have risen because apartment supply is expanding and demand has fallen as consumers worry about the economy and inflation.

Additionally, the large millennial generation is increasingly aging into homeownership, as the smaller Generation Z enters the apartment market.

Prospective renters shouldn’t get too excited, however. Rent is still extremely high.

In September, the median rent for vacant units of all sizes across Los Angeles County was $2,080, down 1.5% from a year earlier but 8% more than in September 2019, according to data from Apartment List.