House prices in the southern part of California continue to maintain their hot streak. July median home prices now stand at $681,750 from $562,000 recorded in the same period 2020. It is an all-time high despite the housing market showing signs of cooling down.
CoreLogic reports that the housing market in southern California added an average of $2000 every week since 2020, hitting a remarkable incline that toppled last year’s figures. The frenzy real estate market showed signs of slowing down when several realtors and experts complained that houses took longer to sell now. In addition, homes available on the market rose, which explains the improvement in inventory and listing.
Still, house prices didn’t decline, as they hit record prices for the sixth consecutive month. Prices at midpoints of sales jumped to $681,750, a 17.5% increase from last year’s levels. Over the past 12 months, median house prices for last month were up by approximately $102,000, equaling a figure of $2000 every seven days.
Bidding Wars Still Responsible for the Increment
Even with the housing inventory rising slightly, homebuyers still compete against each other to clinch their favorite home by outbidding. Those who couldn’t compete are left out, and most of them end up not buying any. Buyers bid above asking prices, and since the market is still a seller’s market, the power to sell to whoever makes the right offer is in the hands of the sellers.
Los Angeles County and Riverside were not left out, as they witnessed bidding wars and record-high median home prices. Los Angeles prices rose to $795,000, up 18.7%, while San Bernardino went up to $455,000 up 21.3%. Riverside and Orange Counties’ prices stood at $525,000 and $904,000, rising 23.2% and 16.6%.
Sales Up 9.8% In July, The Highest For The Month In Sixteen Years
July home sales also rose significantly from July 2020. About 24,947 transactions were closed, the most for July. However, July’s sales are still low compared to June.
Jordan Levine, real estate expert predicts that although the increment is obvious, the market will get back to normal and sales will deepen. However, nobody knows when because the market is still competitive. It is still pricing out incapable buyers due to a lack of affordability. Levine predicts that these priced-out buyers will wait and see if home prices will crash.
Currently, the housing demand is high due to the historically low-interest rates. The interest rates are pushing homebuyers to make the most of the opportunity to get their dream house. That accounted for the record home prices. Before now, it was the pandemic that forced buyers to look for larger homes to work remotely, further increasing the demand.
Soon, the demand will slow down, and home sales will decline as more homes are listed and constructed. If these happen, they will ease off buyers’ competition, and prices may drop.