A housing market slowdown continued through much of the spring homebuying season, with fewer sales and mostly stagnant home prices, causing some to say buyers now have the upper hand in the house hunt.
Recent numbers from property data firm Attom show home sales in the six-county Southern California region decreased from a year ago for the first time in nine months, falling to the second-lowest total for a May in at least 21 years.
Home prices, meanwhile, have mostly leveled off, with values dropping from April to May in three of the region’s six counties.
“It’s definitely been slower than in past years,” said Brandie Jones, a broker-associate with Downey-based Keller Williams Realty for Southeastern Los Angeles. “Buyers aren’t as eager to hop into the market because of all this uncertainty, uncertainty over tariffs.”
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Jones added that many would-be homebuyers are on the fence, waiting to see if interest rates or home prices drop.
For the most part, prices are not dropping in Southern California, although they did fall on an annual basis in Riverside and San Diego counties.
The median price of a Southern California home — or the price at the midpoint of all sales — was $825,000 in May, Attom reported.
On the one hand, that’s a record, topping the last high of $821,000 reached in February. Yet, May’s median was less than 1% above the year-ago level.
Price appreciation in April and May were the smallest for the region in two years, Attom figures show.
“With longer market times, negotiations have shifted in favor of buyers, and they are now calling more of the shots,” Steve Thomas, author of Reports On Housing, said in his latest dispatch.
Slow sales and steadily rising listings are behind the shift.
May saw 14,957 houses, condos and townhomes change hands, or 3.5% fewer than in May 2024, Attom reported Thursday, July 17.
That’s significantly below the May average of 21,000 home sales, and half the tally of May 2005, when buyers snatched up more than 33,000 Southern California homes.
This year’s spring — typically the busiest time of year for housing deals — is the third in a row of rock-bottom sales. Just two other springs, 2020 and 2024, were slower.
“We are seeing homes staying on the market longer, and we’re seeing more price reductions than we did in previous months,” Jones said, adding that buyers are worried about the economy and their job security.
“The ICE raids and things like that, they do have an impact on us. They do have an impact on our people,” Jones added. “People are kind of a little bit hesitant right now.”
Southern California homes are averaging more than 42 days on the market before going under contract, or almost 11 days longer than a year ago, according to the online brokerage Redfin.
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Slightly more sellers also are dropping their prices to make a deal than a year ago, Redfin reported.
Southern California’s active inventory of homes for sale hit the highest level in May and June since the pandemic lockdowns in the spring of 2020. The number of homes for sale increased 70% in the past 1 ½ years.
“The housing market has been tilting in buyers’ favor for months, with buyers getting concessions from sellers and often successfully negotiating sale prices down,” Redfin reported Thursday.
A slowdown in asking-price growth, along with a shrinking gap between asking prices and buyer offers, is a sign that sellers are coming to terms with today’s market, Redfin said.
“Sellers are having to be more realistic in terms of their purchase price,” Jones added. “And the buyer will more than likely ask for some closing costs or ask for a concession, and it would probably be in (a seller’s) best interest to consider that.”
A small improvement in interest rates from a year ago made Southern California homes slightly more affordable.
May’s rates for a 30-year fixed mortgage averaged 6.8%, compared with just over 7% a year earlier. The house payment for a median-priced home was $77 cheaper in May.
Still, the local housing market remains pricey. The median house price was $880,000 in May. Buyers need $1 million to buy the typical house in San Diego County and $1.3 million for an Orange County house.
The median price for a Southern California condo, the most affordable type of housing, was $685,000 in May, topping out at more than $700,000 in L.A. and San Diego counties. In Orange County, a typical condo cost $829,000.
Sales were down from year-ago levels in all six counties, Attom figures show.
Here’s a county-by-county breakdown of median prices and sales totals, with annual percentage changes:
—Los Angeles County’s median rose 2.8% to a record high of $915,000; sales were down 1% to 5,535 transactions.
—Orange County’s median was unchanged at $1.2 million, which ties a record set in May and June 2024 and again this past February and March; sales were down 8.3% to 2,154 transactions.
—Riverside County’s median fell 1.8% to $599,000; sales were down 4.5% to 2,570 transactions.
—San Bernardino County’s median rose 1% to $515,000; sales were down 3% to 1,698 transactions.
—San Diego County’s median fell 0.2% to $900,000; sales were down 4.4% to 2,384 transactions.
—Ventura County’s median rose 3% to $865,000; sales were down 3% to 616 transactions.
