Southern California’s home-price gains have slowed to a crawl as a three-year sales slump continues.
My trusty spreadsheet found skimpy appreciation across the six-county region in July, based on its review of real estate tracker Attom’s latest report on closed purchases of houses and condos. It’s a broad tally of existing and newly constructed residences.
Southern California’s $819,000 median sales price in July was 1% less than the $831,100 record set in June.
But the region’s 1% price gain since July 2024 is the fourth-smallest 12-month advance since May 2023, the last time prices were falling. It’s a stark contrast to the 6% annual average increases of the past 10 years.
Or look at stagnant values this way: The median price rose in only one of the six local counties, Los Angeles, in the year ending in July. That’s the fewest Southern California counties with gains since May 2023.
How slow is it?
Stubbornly elevated prices and mortgage rates iced the market.
Plus, there’s a new house hunter’s headache: a wobbly economy with a shaky job market. That weakness prompted the Federal Reserve on Wednesday to begin lowering the short-term interest rates it controls, the first time it’s done so this year.
How slow is it? Southern California’s 14,969 completed sales in July were the second-slowest July in the last 21 years, behind only July 2023. The current buying pace is 5% below July 2024 and 29% slower than the 21-year average.
It’s not just July 2025. The 504,172 sales over the last 36 months were the slowest three-year span in 21 years and 28% below average. Recall that back in 2022, the Fed ended its purchases of mortgage bonds that were propping up the market during the pandemic.
A rise in listings wasn’t enough to put house hunters in a buying mood. July had 42,245 Southern California residences for sale – up 41% in a year and the largest inventory since September 2019, according to Realtor.com data.
Reluctant house hunters, combined with the increased competition among sellers, may have capped local prices.
Payment pain
Contemplate the financial hurdles faced by a Southern California home seeker.
A typical buyer got a $4,267 estimated monthly house payment in July – the ninth-highest on record. July’s cost burden, based on a 6.8% mortgage rate and a 20% down payment, was off 0.4% from a year ago when rates were 6.9%.
Taking a longer view, this house payment yardstick has increased 156% over 10 years – a result of 87% price appreciation and the loss of July 2015’s 4% mortgages.
If you assume July 2025’s payment is 30% of a household’s income, that means this summer’s buyer must earn $171,000 annually. Ten years ago, only $67,000 was needed.
And don’t forget the 20% down payment, which helps to lower monthly costs. It’s grown to $164,000 from $88,000 in 10 years.
So, it is zero surprise that only 17% of Southern California households could theoretically afford to buy a single-family home at mid-year 2025, according to a combination of California Association of Realtors affordability indexes and Attom sales data. Ten years ago it was 33%.
However, could the worst of the affordability crunch be over as mortgage rates slipped this summer?
Southern California’s estimated monthly payment would be $212 cheaper at mid-August’s 6.3% rates – a 6% drop in costs – assuming flat pricing.
This discounted financing might boost homebuying and provide a floor for prices – if the economy doesn’t go into a nosedive, hammering the jobs needed for mortgage payments. Rates typically fall when the economy needs help.
Counting counties
Similar sluggish homebuying patterns were observed across Southern California’s six counties in July, as ranked by one-year sales changes.
Riverside: 2,437 sales – the third-slowest July in 21 years and 9% below July 2024. Median price? $600,000 – seventh-highest – and flat in a year.
San Diego: 2,375 sales – No. 2 slowest and 8% below July 2024. Median price? $900,000 – No. 3 highest and flat in a year.
Los Angeles: 5,509 sales – No. 2 slowest and 4% below July 2024. Median price? $910,000 – No. 3 highest and 1% higher in a year.
San Bernardino: 1,834 sales – No. 2 slowest and 4% below July 2024. Median price? $520,000 – No. 13 highest and 1% lower in a year.
Orange: 2,168 sales – No. 3 slowest and 0.05% above July 2024. Median price? $1.18 million – No. 11 highest and 0.4% lower in a year.
Ventura: 646 sales – No. 3 slowest and 1% above July 2024. Median price? $850,000 – No. 10 highest and 1% lower in a year.
Big picture
It’s not just a Southern California sales swoon.
California’s 28,899 sales in July were the second-slowest July in 21 years and 5% below July 2024. The median $740,000 price was the 10th highest and 1% lower in a year.
Nationwide, 370,846 sales were the sixth-slowest July and 4% below July 2024. Median price? $370,750 was second-highest and 3% higher in a year.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
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