Single-family home prices in California, including Southern California, continued to surge in August. However, sales volumes declined due to a shortage of listings.

According to the California Association of Realtors (CAR) monthly report on August home sales and price trends released on the 26th, 262,050 existing single-family homes (seasonally adjusted) were sold in California in August, a 6.3% decrease from July’s 279,810 units. Compared to the 254,820 units sold in August of the previous year, this marked a 2.8% increase.

August marks the 23rd consecutive month that the monthly sales volume in the California housing market remained below 300,000 units.

The median price for single-family homes sold in California in August was $888,740, a 0.2% increase from July’s $886,560 and a 3.4% rise compared to $859,670 in August of last year. The median single-family home price has risen for 14 consecutive months year-over-year. In the past 17 months, the median price has exceeded $800,000 for 16 months, highlighting the continuous price hike. Leading the price surge is the market for homes priced over $1 million. According to CAR, homes sold for over $1 million in August decreased by 3.4% compared to the previous year, while sales of homes under $500,000 dropped by 9.0%. In August, homes priced over $1 million accounted for about one-third of total sales in the California housing market, and this percentage continues to grow.

The analysis indicates that homes priced under $500,000 are becoming increasingly scarce in California, making it harder for buyers to find affordable options. Additionally, the ongoing shortage of housing supply has intensified competition among buyers.

Melanie Barker, president of CAR, said, “August is usually the peak of the summer selling season, but home sales were generally sluggish,” pointing out that “the housing market in August still showed that buying a home is difficult due to higher mortgage rates and a lack of inventory compared to the pandemic period.” However, the 30-year fixed mortgage rate in August averaged 6.50%, down from 7.07% in the same period last year.

In Southern California’s housing market, prices rose in August, while sales volume generally declined. The median sales price for single-family homes in Southern California was $863,500, a 4.9% increase from $830,000 in the same period last year. On the other hand, sales volume in July dropped by 5.3% compared to the previous month and by 2.3% year-over-year.

By county, the median sales price in Los Angeles County in August was $919,890, up 1.2% from $909,010 in the previous month and up 4.3% from $882,010 a year earlier. August home sales in LA County decreased by 3.2% compared to July, while remaining unchanged year-over-year.

Orange County had the highest median sales price in Southern California at $1.4 million in August, a 0.7% increase from $1.39 million the previous month, and a 6.9% rise from $1.31 million the previous year. OC sales volume dropped by 6.5% month-over-month and by 7.3% year-over-year in August.

Riverside County's median sales price in August increased by 1.9% year-over-year, San Bernardino County by 4.0%, Ventura County by 5.5%, and San Diego County by 1.0%, continuing the upward price trend. However, sales volume in these counties turned to a year-over-year decline in August as well.

Jordan Levine, CAR’s Senior Vice President and Chief Economist, said, “The California housing market is facing chronic issues of high prices and inventory shortages,” but he remains optimistic, stating, “As inflation eases and mortgage rates drop due to lower benchmark rates, we expect to see a rebound in home sales.”

By Hwandong Cho

<Hwandong Cho>