Housing prices in Southern California, including the broader state of California, continued to soar in December 2023 and into 2024. With inventory still insufficient compared to demand, sales volume also showed a significant increase compared to the previous year.

According to the California Association of Realtors (CAR) "December and 2024 Housing Sales and Price Trends Monthly Report" released on the 7th, the number of existing single-family homes sold in California in December was 268,180, a 19.8% increase compared to 223,940 homes sold in the same month last year. Compared to the previous month's 267,800 homes sold, this was a slight 0.1% increase.

Due to the ongoing severe shortage of inventory, the number of homes sold in California has remained below 300,000 units for 27 consecutive months, including December.

In December, the median price for single-family homes sold in California was $861,020, which represents a 5.0% increase compared to $819,820 in the same month the previous year. This is also a 1.0% increase compared to the previous month's median of $852,880.

The median home price for single-family homes has been rising year-over-year for 18 consecutive months. The median price of California single-family homes has surpassed $800,000 for 20 out of the last 21 months, indicating a strong upward trend. The segment of high-priced homes over $1 million is driving the price increases in California’s housing market. According to CAR, sales of homes over $1 million increased by 28.7% year-over-year in December, while sales of homes priced under $500,000 decreased by 0.4% compared to the previous year. Homes priced over $1 million now account for more than one-third of all home sales in California, with this share steadily rising.

On the other hand, there is a shortage of homes priced under $500,000 in California, making it nearly impossible for buyers to find affordable homes. The supply of homes for sale is unable to meet the demand, creating intense competition among buyers.

The median price of condos in California in December was $664,550, a 4.7% increase compared to $635,000 in the same month the previous year. However, this was a 1.5% decrease compared to the previous month's median of $675,000. Condo sales in December increased by 16.3% year-over-year and 8.1% compared to the previous month.

Jordan Levine, CAR’s Chief Economist, stated, “In December, the slight decline in mortgage rates and intense competition among buyers led to a significant increase in sales. However, the situation still reflects the higher mortgage rates compared to the pandemic period, along with the ongoing inventory shortage, making it difficult for buyers to purchase homes.” The average 30-year fixed mortgage rate in December was 6.72%, which was a 0.1 percentage point decrease compared to 6.82% in the same month last year.

The Southern California housing market also saw an increase in both sales prices and sales volume in December, compared to both the previous month and the previous year. The median price for single-family homes in Southern California in December was $850,000, a 7.6% increase from $790,000 in the same month the previous year. It remained unchanged compared to the previous month's price of $850,000. Sales in Southern California in December increased by 16.3% year-over-year and 8.1% month-over-month.

Breaking it down by county, the median price for single-family homes in Los Angeles County in December was $912,370, a 6.9% increase from $853,340 in the same month the previous year. The number of homes sold in Los Angeles County increased by 16.2% year-over-year and 12.7% compared to the previous month.

In particular, Orange County recorded the highest median home price in Southern California at $1,362,000. This represents a 4.8% increase from $1,300,000 in the same month last year, but a 0.9% decrease from the previous month's price of $1,375,000. The number of homes sold in Orange County increased by 20.7% year-over-year and 1.8% month-over-month.

Riverside County saw a 13.9% year-over-year increase in the median home price for December, while San Bernardino County increased by 9.6%, Ventura County by 7.4%, and San Diego County by 1.5%. Price increases continued across the region. Year-over-year sales also increased in San Diego County by 27.0%, Ventura County by 25.5%, Riverside County by 11.0%, and San Bernardino County by 4.2%.

Heather Ozur, CAR President, commented, “The California housing market is expected to continue to see price increases due to high prices and inventory shortages. However, with the recent rise in mortgage rates and the threat of large wildfires, the uncertainty in the market has increased at the beginning of the year.”

<Hwandong Cho>