In June, Orange County experienced a surge in median home prices, reaching a new record high. Meanwhile, Los Angeles County’s prices remain 3% below its peak.
Despite the sluggishness in homebuying, there were 7,574 houses and condos sold in both counties during June. This reflects a 2% increase compared to the previous month, but a 21% decrease compared to the same time last year.
What is particularly significant is the slow pace of sales:
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- June 2023 had the second slowest-selling record in LA and Orange County since 1988.
- It was the 52nd smallest sales total in over 35 years, accounting for only 12% of all months with slower sales.
- It was 41% below the average sales pace for June in LA and Orange County since 1988.
- Over the past 12 months, the 109,365 sales were 36% below the average.
However, despite the slow sales, there has been an increase in median prices. Orange County’s median price rose to $1.059 million, a 5.9% increase in a month and 3% higher than a year ago. This surpassed the previous peak of $1.05 million in May 2022.
In Los Angeles, the median price reached $830,000, a 3.8% increase in a month, but a 2% decrease compared to the previous year. It is currently 3% lower than the record high of $860,000 set in April 2022.
This reflects the volatility of the housing market in the first half of 2023, which made many potential buyers hesitant. High mortgage rates have reduced buying power by 13% within a year, and economic uncertainty has added to the challenges. However, prices have remained stable due to fierce competition among buyers for the limited number of homes available on the market.
In Southern California, sales have declined by 24% over the past year, reaching a total of 16,320, while the median sales price decreased by 0.7% to $730,000.
Slow sales
Buying activity is significantly below average. In Los Angeles County, there were 5,278 closings in June, a 2% increase compared to the previous month, but a 23% decrease from the previous year. Similarly, Orange County had 2,296 sales, a 0.3% decrease compared to the previous month, and a 17% decrease compared to the previous year.
Note: On average, June typically sees a 6% growth in one-month sales in both counties.
Payment pain
One of the contributing factors to the slowdown in sales is the higher cost of financing. In June, the 30-year mortgage rate averaged 6.71%, compared to 5.52% a year ago.
Based on calculations, buyers in Los Angeles County have experienced an estimated 11% increase in house payment, with a monthly payment of $4,289 for the median price of $830,000, assuming a 20% downpayment of $166,000. In Orange County, buyers face a 17% increase in payment, with a monthly payment of $5,472 for the median price of $1,059,000, assuming a 20% downpayment of $211,800.
Single-family homes
Sales: In Los Angeles, there were 3,791 transactions, a 5% increase compared to the previous month, but a 20% decrease from the previous year. In Orange County, there were 1,492 closings, a 5% increase compared to the previous month, but a 12% decrease from the previous year.
Prices: The median price for single-family homes in Los Angeles County was $900,000, a 4% increase compared to the previous month, but a 3% decrease from the previous year. In Orange County, the median price was $1,208,000, a 1% increase compared to the previous month, and a 1% increase from the previous year.
Condos
Sales: In Los Angeles, there were 1,252 condo units sold, a 1% decrease compared to the previous month, and a 25% decrease from the previous year. In Orange County, there were 629 condo units sold, a 12% decrease compared to the previous month, and a 25% decrease from the previous year.
Prices: The median price for condos in Los Angeles County was $683,750, a 3% increase compared to the previous month, but a 2% decrease from the previous year. In Orange County, the median price was $750,000, a 4% increase compared to the previous month, and a 3% increase from the previous year.
New homes
Sales: In Los Angeles, there were 154 new homes sold, a 25% decrease compared to the previous month, and a 38% decrease from the previous year. In Orange County, there were 172 new residences sold, a 6% increase compared to the previous month, but a 19% decrease from the previous year.
Prices: The median price for new homes in Los Angeles County was $910,500, a 6.1% increase compared to the previous month, but no change from the previous year. In Orange County, the median price was $1.16 million, a 16% increase compared to the previous month, but a 21% decrease from the previous year.
Builder share: In Los Angeles, new homes accounted for 2.9% of all closings last month, compared to 3.6% the previous year. In Orange County, new homes accounted for 7.5% of all closings last month, compared to 7.7% the previous year.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]
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