Southern California Real Estate Market Trends

By OfferBanc Marketing | February 10, 2023

The following analysis of select counties of the Southern California real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner for Q4 2022

We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

Regional Economic Overview

Employment growth in Southern California continues to slow, with only 33,400 jobs added over the past three months. Annual growth also slowed: only 141,100 new jobs were added, which is down from 347,700 added between September 2021 and September 2022. Total employment in the counties covered by this report is still 305,300 shy of the region’s pre-pandemic peak. Los Angeles County still has the largest shortfall (-310,000), followed by Orange County (-36,800) and San Diego County (-19,500). Employment levels in the Riverside and San Bernardino markets remain well above pre-pandemic levels. The region’s unemployment rate in November was 4%, down from 5.4% a year ago. The lowest rates were in Orange County (3%) and San Diego County (3.3%).

Southern California Home Sales

❱ In the final quarter of 2022, 28,953 homes sold. This is 43.9% lower than the same period the year prior and down 24.5% compared to the third quarter of 2022.

❱ Pending home sales, which are an indicator of future closings, were down 30% from the third quarter, suggesting that sales activity in the first quarter of this year may also be down.

❱ On a percentage basis, sales fell the most in Riverside County, but all markets pulled back significantly. Compared to the third quarter, sales were down 24.5%, or 9,400 units.

❱ The lower number of sales can be attributed to more listings in the market, which were up 83.5% year over year, and higher mortgage rates, which make homes less affordable.

A bar graph showing the annual change in home sales for various counties in Southern California from Q4 2021 to Q4 2022. All counties have a negative percentage year-over-year change. Here are the totals: Orange at -42.2%, Los Angeles at -42.9%, San Bernardino -44.3%, San Diego -44.9%, and Riverside -45.9%.

Southern California Home Prices

❱ Fourth quarter home sale prices were .7% higher than the same period the prior year but were 2.5% lower than in the third quarter of 2022.

❱ Mortgage rates, which peaked in October, have impacted both the number of sales and prices. Median listing prices were down 4.9%, which indicates that sellers have been adjusting their expectations, but I believe they will fall further before stability in the market is restored.

❱ The region had very modest price growth in all markets other than Orange County, where prices fell 2.8%. Compared to the third quarter of 2022, prices were lower across all markets other than Los Angeles County, where they rose .2%.

❱ Mortgage rates have started to pull back. If this continues, I am hopeful that the second half of 2023 will be more active, resulting in rising sales and home prices.

A map showing the real estate home prices percentage changes for various counties in Southern California. Different colors correspond to different tiers of percentage change. Orange County have a percentage change in the -3% to -0.1% range, Los Angeles and Riverside are in the 0.5% to 0.9% change range, and San Diego and San Bernardino are in the 1.5%+ change range.
A bar graph showing the annual change in home sale prices for various counties in Southern California from Q4 2021 to Q4 2022. San Bernardino County tops the list at 1.8%, followed by San Diego at 1.6%, Riverside and Los Angeles at 0.6%, and Orange at -2.8%.

Read the Full Story Here:
https://www.windermere.com/market-update/southern-california

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