How is the housing market now in terms of the numbers?

9/18/24

SoCal home prices shifted downward on average for the first time this year based on data for Los Angeles, San Bernardino, Riverside, and Orange Counties.

Prices:

San Bernardino is the only county among them where the median home price rose during August.  In all the other counties, the median price dropped. However, all four counties still have higher median prices now than they did at this time last year. Orange County is up the most with 8.6% appreciation compared to last year, and Riverside County is up the least with 3.8% appreciation compared to last year.

Inventory:

The number of available homes ticked up in August. The four counties collectively have a little over 400 more homes for sale now compared to July. That’s six months in a row of increasing inventory, and it’s up about 17% compared to last year. However, this is still much lower than pre-pandemic levels.

Time on market:

The pace of home sales slowed just a hair in August, but most homes aren’t sitting a long time. About half of the homes in the region sold in 15 days or fewer. This is a little slower than the pace a year ago when half the homes sold in 13 days or fewer.

Supply from sellers vs. demand from buyers:

The relative strength of buyers versus sellers moved a little bit toward the buyer side in August, but buyers still greatly outnumber sellers. Months of inventory measures supply relative to demand. As months of inventory drops, the market is heating up, and as it rises, the market is cooling down. During August, months of inventory rose a hair from 3.30 to 3.35 on average. This is the sixth month in a row of slight cooling, and it’s the coolest month since July 2022. On the other hand, it would still take almost double the current inventory to balance current demand, so there’s still quite a bit of heat left in the market.

What this means for sellers:

Well-priced homes are still likely to receive multiple offers and get strong prices relative to recent comparable sales. If the slight cooling trend continues, bidding wars might not be as intense as they were in the first part of the year, so accurate pricing will be even more important. The recent drop in interest rates will likely allow buyers to afford higher offers in competitive situations, which will support continued rises in prices overall.

What this means for buyers:

Buyers should be prepared for competition on well-priced, good-looking homes. Under these conditions, prices typically rise, so I don’t expect a big drop in prices in the near future. Also, the recent drop in interest rates will make it easier for competing buyers to raise their bids. However, it’s becoming more likely that some sellers will accidentally overprice, which will open opportunities for buyers to negotiate more favorable terms with less competition.

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