As Southern California and other areas across California experience a continued surge in home prices this September, home sales have shown slight month-to-month improvement despite a year-over-year decrease in volume.

According to the California Association of Realtors (CAR) monthly report on housing sales and price trends, 253,010 single-family homes were sold across California in September, reflecting a 5.1% increase from the previous year’s 240,840 units. However, compared to August’s 262,050 units, sales saw a 3.4% dip.

For 24 consecutive months through September, the state’s monthly home sales have remained below 300,000.

The median price of single-family homes in California reached $868,150 in September, a 2.9% increase from last year’s $843,500, although it showed a 2.3% decline from August’s $888,740. Median single-family home prices have risen year-over-year for 15 consecutive months. California has seen median prices above $800,000 in 17 out of the last 18 months, reflecting a robust and consistent price trend. (See chart)

High-end homes, priced over $1 million, are driving this price increase in the California housing market. CAR reports that sales of homes priced above $1 million rose by 3.9% compared to last year, while sales of lower-priced homes under $500,000 dropped by 8.6%. In September, homes priced above $1 million comprised nearly one-third of all sales in California. This trend highlights the challenges facing buyers seeking lower-priced homes due to limited inventory, fueling competitive bidding among buyers.

CAR Chief Economist Jordan Levine noted, “September sales activity softened as the peak summer season passed, and despite improvement, high mortgage rates and limited inventory continue to make home buying challenging.” The average 30-year fixed mortgage rate in September was 6.18%, a decline from the previous year’s 7.20% by 1.02%.

In Southern California, September saw median prices increase, with a slight improvement in sales volume over the previous month. The median price for single-family homes in Southern California was $850,000 in September, marking a 3.7% increase from last September’s $820,000. Southern California sales volume rose 1.1% year-over-year but dropped 9.5% compared to the previous month.

By county, LA County’s median sales price reached $960,370, marking a 5.0% increase from last year’s $914,340. However, September sales volume in LA County declined by 2.5% year-over-year and 6.8% month-over-month. Orange County saw the highest median sales price in Southern California at $1,397,450. This price reflects a 6.7% year-over-year increase but a minor 0.2% dip from August’s $1.4 million. Sales in Orange County rose 0.4% year-over-year but declined 10.4% from the previous month.

Riverside County saw a 4.2% year-over-year increase in median home price, while San Bernardino and San Diego counties saw increases of 5.3% and 2.8%, respectively. Ventura County’s median price, however, dropped by 6.5%. San Bernardino and San Diego counties also saw year-over-year sales volume increases of 3.1% and 9.4%, respectively. Conversely, Riverside and Ventura counties experienced year-over-year declines in sales volume by 1.8% and 3.3%, respectively.

CAR President Melanie Barker highlighted, “The California housing market continues to face chronic issues of high prices and inventory shortages.” However, she expressed optimism, stating, “With inflation easing and mortgage rates expected to decrease following rate cuts, we anticipate potential rebounds in home sales.”

<Hwandong Cho>