Southern California Housing Market Forecast: Will it Crash? – Norada Real Estate Investments

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Southern California Housing Market

The Southern California Housing Market has shown resilience in the face of rising interest rates, as reported by the California Association of Realtors (CAR). Despite the challenges posed by higher borrowing costs, home prices in the region have managed to maintain their stability.

In November 2023, the housing market in California experienced a significant downturn, marked by the lowest sales levels in 16 years, as reported by the California Association of Realtors (C.A.R.). The primary culprit behind this decline is the presence of elevated borrowing costs, placing a considerable strain on prospective homebuyers.


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So, how is the Southern Cal housing market doing? This negative trend in home sales extended across all major regions, with Southern California bearing a particularly heavy burden. On a year-over-year basis, Southern California witnessed a substantial -5.6% decline in home sales in November 2023, highlighting the severity of the market challenges.

Median Sold Prices and Sales Dynamics

Examining the median sold prices of existing single-family homes provides a nuanced perspective on the market dynamics during this period. In Southern California, the median sold price reached $824,500 in November 2023, representing a marginal increase from October 2023 ($820,000). However, when compared to November 2022 ($750,000), the year-over-year increase is a noteworthy 9.9%.

Despite the upward trajectory in prices, the month-to-month change indicates a modest 0.5% increase, while the year-over-year change in sales volume reveals a substantial -14.2% decrease, emphasizing the impact of elevated borrowing costs on the real estate market.

Regional Disparities

The data further reveals specific regional disparities that contribute to the complexity of the housing market landscape:

  • Los Angeles: Despite a modest 0.5% increase in prices, Los Angeles experienced a significant -15.6% year-over-year drop in sales, underscoring the challenges faced by one of the most prominent real estate markets in the region.
  • Orange County: Contrary to the overall trend, Orange County witnessed a substantial 18.2% year-over-year increase in median sold prices, managing to record a 3.7% increase in sales, showcasing resilience in the face of broader market challenges.
  • Riverside and San Bernardino: These counties faced challenges with price fluctuations and notable sales declines, indicating a more challenging market environment compared to some of their counterparts.
  • San Diego: Despite a 1.7% monthly price increase, San Diego experienced a -12.2% year-over-year decline in sales, emphasizing the persistent hurdles in the Southern California housing market.
  • Ventura: With a moderate 0.4% price increase, Ventura faced a -4.3% year-over-year decrease in sales, reflecting the broader market challenges in the region.

Southern California Housing Market Forecast: Will it Crash?

The forecast for the Southern California Housing Market for the years 2023-2024 suggests a dynamic real estate landscape shaped by various factors. Rising interest rates will continue to influence the market, impacting both buyers and sellers. However, opportunities for growth and stability exist, with county-level variations providing unique market dynamics.

  • Interest Rates and Market Behavior: The prevailing trend of rising interest rates will remain a central driver of the housing market. Buyers are expected to be more selective, while sellers may need to adapt to changing conditions. The cost of borrowing will play a pivotal role in shaping sales volume and affordability.
  • County-Level Variations: Southern California’s housing market is a diverse landscape, with county-specific dynamics. Price growth is anticipated, but the pace and magnitude will differ across regions. Buyers and sellers need to be aware of these variations and adjust their strategies accordingly.
  • Adaptation and Resilience: As we look ahead to 2023-2024, the key to success in the Southern California housing market lies in adaptation. Buyers, sellers, and real estate professionals should consider creative financing options and effective marketing strategies. Resilience and flexibility will be essential in navigating the evolving market.
  • Economic Factors: Economic indicators, such as interest rates and employment rates, play a crucial role in shaping the housing market. The recent increase in interest rates might have initially impacted sales but could stabilize in the coming months. As economic conditions improve, and with the potential moderation of interest rates, buying sentiments may improve, giving the market a boost towards the end of the year.

Considering these trends and factors, the Southern California housing market is expected to maintain a relatively stable trajectory for the rest of 2023. Moderate price increases, steady sales, potential improvement in inventory, and favorable economic conditions are likely to define the market in the upcoming months.

However, it’s essential to remember that real estate markets can be influenced by various unpredictable factors. Hence, regular monitoring of market updates and consulting with real estate professionals for the latest insights is highly recommended for those looking to make informed decisions in the housing market.

ALSO READ:

Bay Area Housing Market Prices & Forecast

Los Angeles Real Estate Marke Prices And Forecast

San Diego Real Estate Market Forecast

Sacramento Real Estate Market Prices & Forecast


Sources:

  • https://www.car.org/
  • https://www.noradarealestate.com/blog/housing-market-predictions/

This post was originally published on 3rd party site mentioned on the title of this site

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