The number of homes sold in Southern California fell from January to February, with a decline of 6.1 percent in Los Angeles County, according to a new report from real estate tracker CoreLogic.
Rising mortgage rates could explain some of the drop in sales, but CoreLogic analyst Andrew LePage points to a “decline in affordability” and a “thin inventory of homes for sale” as other major factors.
At first glance, a slight drop in sales might not seem too surprising, considering that, you know, February has three less days than January. But historically, Southern California home sales have actually risen slightly in February over January, when sale numbers are typically fairly low.
Total sales are also down 2.3 percent in LA County since February of last year. Overall, 4,862 homes sold last year. Across all of Southern California, 14,891 homes sold last month, which is 13.5 percent lower than the February average since 1988.
While the number of homes sold dropped overall, sales over $500,000 rose 11 percent since February of 2016. Meanwhile, sales of $800,000 or more were up 10.5 percent and sales over $1 million increased by 14.1 percent. This rise in sales of high-priced homes could simply mean more deep-pocketed buyers are house hunting lately, but it also suggests that buyers are stretching their budgets to keep up with rapidly rising prices.
While the median LA County sale price of $525,000 was flat between January and February, that number represents an increase of nearly 8 percent over February 2016.
Fortunately for aspiring homebuyers, such rapid price escalation may not continue into 2017. “[I]f mortgage rates continue to increase,” LePage says, “it will be more difficult for home prices to rise as fast.”