For Los Angeles’s real estate market, 2018 ended with barely a whimper. Just 5,291 homes sold in December, representing a 20 percent drop since the same time last year, according to a new report from CoreLogic.
The county’s median sale price—$581,500—was slightly higher than in December of last year, but down 3.1 percent since November. It was also more than 5 percent below levels reached in August, when LA’s median sale price of $615,000 tied an all-time record.
Year-over-year, prices are up just 2 percent in LA County, and a measly 1.1 percent across all of Southern California.
Across the region, the number of homes and condos sold has fallen off dramatically since last year and are now at their lowest level since last year. The 15,781 December sales in Southern California was the lowest for that month since 2007, at the start of the subprime mortgage crisis.
CoreLogic analyst Andrew LePage points out that more homes typically sell in December than in November. This year, though, sales dropped 8 percent across all of Southern California between those months.
“This drop in activity reflects a variety of factors,” says LePage. One of those factors is mortgage interest rates, which climbed for most of 2018, limiting the ability of buyers to stretch their budgets.
LePage also says that “some would-be buyers remain priced out or unwilling to buy amid concerns that prices have overshot a sustainable level.”
Though home prices still haven’t reached pre-recession levels when adjusted for inflation, they are now rising at the slowest level in years. December’s year-over-year median price gain across all of Southern California was the lowest since 2012.
One reason for that could be that the recent drop in sales has disproportionately affected higher-priced homes. LePage suggests that some wealthy buyers may have held off on buying close to the end of the year due to concerns about the stock market.
Unfortunately for prospective buyers, that means that prices for more affordable homes are probably still climbing relatively steadily as 2019 gets underway.