The average home price in the six-county region now stands at $876,280, up 0.4% from May, according to data from Zillow.

Prices rose in all counties, including Los Angeles County, where the typical home costs $892,304.

In Orange County, the average is $1.16 million.

The increases represent another hit for prospective home buyers struggling to afford a home in an expensive region at a time when interest rates are the highest they’ve been in more than 20 years.

Only 14% of L.A. County households could reasonably afford a median-priced house in the fourth quarter, according to the California Assn. of Realtors. In the Inland Empire, the situation is better, but still fewer than 30% of households in Riverside and San Bernadino counties can afford a median-priced single-family house.

While affordability is the worst it has been since the 2000s housing bubble, some relief could be on the way.

Economists say home values are rising because of a shortage of homes for sale, though that is easing somewhat.

In June, the number of homes for sale in L.A. County rose 22% from a year earlier, the third consecutive month supply has risen. Other counties saw similar increases.

When mortgage interests rates surged in 2022, home prices fell as buyers pulled away and inventory swelled. But prices started rising again last year as homeowners increasingly chose not to sell, unwilling to give up rock-bottom mortgage rates on loans taken out before and during the COVID-19 pandemic.

Now, economists and real estate agents say homeowners increasingly believe rates in the 6% to 7% range are here to stay and are deciding a new home is more important than keeping a 3% mortgage.

In theory, if the supply of homes for sale increases enough, home prices would fall. But many economists cite several reasons they believe that won’t happen.

California has long built too few homes relative to demand, the economy is growing and many homeowners will still choose to hold on to their ultra-low-rate mortgages.

A more likely scenario, according to experts, is home values will rise less than they have been, providing an opportunity for incomes to catch up.

That might already be happening.

June’s nearly 8% annual price increase is less than the 9% gains posted in recent months and the lowest since January.

Richard Green, director of the USC Lusk Center for Real Estate, said it’s too early to tell if home price growth is really starting to slow, or if the deceleration Zillow shows is noise in the data.

That said, he does expect a slowdown to come.

“Prices can’t go up 8% a year forever,” Green said.

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The abnormal scarcity — compounded by the region’s long-running underproduction of housing — emerged when homeowners chose not to sell and give up pandemic-era mortgage rates. The so-called seller strike helped pushed home values to new records, despite rising borrowing costs.

Now the inventory picture might be changing.

“It’s getting a little bit better,” said Eneida Contreras, a Compass real estate agent who specializes in the San Fernando, Santa Clarita and Antelope valleys.

In April, the number of homes listed for sale in most Southern California counties rose from the same month a year earlier, according to data from Zillow.

Los Angeles, Riverside, San Bernardino and Ventura counties turned positive for the first time since the first half of 2023, each recording an increase of at least 5%.

Orange was the only county to see a decline, while in San Diego, inventory has risen for two consecutive months and is 18% above what it was a year ago.

To be sure, the availability of homes remains at historically low levels. But as it rises, it opens the possibility that prospective buyers will have an easier time making the largest purchase of their lives.

Jordan Levine, chief economist with the California Assn. of Realtors, said more homes are coming onto the market because owners are increasingly accepting that the new normal is interest rates in the 6%-7% range.

As people get married, divorced and have children, the “benefit of the low rate starts to be outweighed by having a house that doesn’t work,” Levine said. “Ultimately, these are people’s homes, too, and they are not just straight-up investments.”

Levine said he expects inventory levels to increase and home prices to be lower than they would have been if inventory continued to shrink. However, he and other experts said home prices are unlikely to decline. That’s because though more owners are coming to terms with high rates, many will likely choose to keep their sub-4% mortgages — a phenomenon known as the lock-in effect.

Other factors are at play. The economy is growing, and while most Southern California households can’t afford to buy, there’s a sizable population of techies, Hollywood types and other white-collar workers who can funnel excess cash into large down payments that offset high mortgage rates.

“The current level of inventory rise — which is a little bit, but not a lot — is likely to slow price appreciation but not turn it negative,” said Mike Simonsen, founder of Altos Research, a real estate data firm.

The rise in inventory is providing opportunities for buyers with means, but the market is still tough.

Interest rates are above 7%, and even if home prices rise at a slower pace, they will set records.

In Los Angeles County, the average home price in April was $890,516, an increase of 1.4% from March and surpassing the previous record, set in June 2022.

The six-county Southern California region climbed above its 2022 average home price record in March. It set another all-time high last month, reaching $875,388.

If mortgage rates noticeably decline, the lock-in effect could lessen and bring more homes onto the market. Falling mortgage rates would also immediately make housing more affordable.

Whether falling rates provide much relief is another question. Lower borrowing costs may bring a flood of additional buyers who quickly gobble up new listings and supercharge price growth.

“Building more housing is really what is going to break that cycle,” said Nicole Bachaud, a senior economist with Zillow.

According to the latest forecast from the Mortgage Bankers Assn., rates will remain high but will drop to 6.4% by the end of 2024.

Carol Otero of Rodeo Realty is among the Los Angeles agents seeing an increase in inventory. She estimated that the number of homes for sale in some San Fernando Valley neighborhoods has at least doubled in the past few weeks.

Buyers are eager.

Last Friday, Otero listed a four-bedroom home in Northridge. She said she has received six offers, all above the $869,000 asking price.

The post Buying a home in Southern California? There are now more options appeared first on The Hemet & San Jacinto Chronicle.

The abnormal scarcity — compounded by the region’s long-running underproduction of housing — emerged when homeowners chose not to sell and give up pandemic-era mortgage rates. The so-called seller strike helped pushed home values to new records, despite rising borrowing costs.

Now the inventory picture might be changing.

“It’s getting a little bit better,” said Eneida Contreras, a Compass real estate agent who specializes in the San Fernando, Santa Clarita and Antelope valleys.

In April, the number of homes listed for sale in most Southern California counties rose from the same month a year earlier, according to data from Zillow.

Los Angeles, Riverside, San Bernardino and Ventura counties turned positive for the first time since the first half of 2023, each recording an increase of at least 5%.

Orange was the only county to see a decline, while in San Diego, inventory has risen for two consecutive months and is 18% above what it was a year ago.

To be sure, the availability of homes remains at historically low levels. But as it rises, it opens the possibility that prospective buyers will have an easier time making the largest purchase of their lives.

Jordan Levine, chief economist with the California Assn. of Realtors, said more homes are coming onto the market because owners are increasingly accepting that the new normal is interest rates in the 6%-7% range.

As people get married, divorced and have children, the “benefit of the low rate starts to be outweighed by having a house that doesn’t work,” Levine said. “Ultimately, these are people’s homes, too, and they are not just straight-up investments.”

Levine said he expects inventory levels to increase and home prices to be lower than they would have been if inventory continued to shrink. However, he and other experts said home prices are unlikely to decline. That’s because though more owners are coming to terms with high rates, many will likely choose to keep their sub-4% mortgages — a phenomenon known as the lock-in effect.

Other factors are at play. The economy is growing, and while most Southern California households can’t afford to buy, there’s a sizable population of techies, Hollywood types and other white-collar workers who can funnel excess cash into large down payments that offset high mortgage rates.

“The current level of inventory rise — which is a little bit, but not a lot — is likely to slow price appreciation but not turn it negative,” said Mike Simonsen, founder of Altos Research, a real estate data firm.

The rise in inventory is providing opportunities for buyers with means, but the market is still tough.

Interest rates are above 7%, and even if home prices rise at a slower pace, they will set records.

In Los Angeles County, the average home price in April was $890,516, an increase of 1.4% from March and surpassing the previous record, set in June 2022.

The six-county Southern California region climbed above its 2022 average home price record in March. It set another all-time high last month, reaching $875,388.

If mortgage rates noticeably decline, the lock-in effect could lessen and bring more homes onto the market. Falling mortgage rates would also immediately make housing more affordable.

Whether falling rates provide much relief is another question. Lower borrowing costs may bring a flood of additional buyers who quickly gobble up new listings and supercharge price growth.

“Building more housing is really what is going to break that cycle,” said Nicole Bachaud, a senior economist with Zillow.

According to the latest forecast from the Mortgage Bankers Assn., rates will remain high but will drop to 6.4% by the end of 2024.

Carol Otero of Rodeo Realty is among the Los Angeles agents seeing an increase in inventory. She estimated that the number of homes for sale in some San Fernando Valley neighborhoods has at least doubled in the past few weeks.

Buyers are eager.

Last Friday, Otero listed a four-bedroom home in Northridge. She said she has received six offers, all above the $869,000 asking price.

The post Buying a home in Southern California? There are now more options appeared first on The Hemet & San Jacinto Chronicle.

Only the weather is cooling down this fall, as the speed of home sales continues to accelerate, especially for shoppers seeking entry-level homes.

New Zillow® research shows many homes sold just days after hitting the market in September, regardless of price, with the typical 1 U.S. home going under contract in just over two weeks. This is one day quicker than August, about 44% faster than this time last year, and significantly faster than even a typical spring selling season. May is when the market is usually the hottest, but homes this September moved six days faster than they did in May 2019 .

And while speedier sales were common across all price ranges, lower priced homes typically sold the fastest. Entry-level homes priced between $186,000 and $260,000 were snatched up most quickly, going under contract at 14 days, six days faster than the same time last year. Mid-market homes (between $260,001 and $344,000 ) were not far behind that pace, selling in 16 days, and the most affordable ( $185,999 or less) typically took 18 days to sell this September, in part because that group tends to include more fixer-uppers.

Quicker-than-normal home sales for entry-level and mid-market homes shows that many buyers may be re-evaluating their home’s functionality as they work, live, and play at home. For renters, working from home and record-low mortgage rates have opened up more homeownership opportunities for first-time buyers wanting to take the leap into the housing market and secure a starter home. That means buyers looking for more desirable features, such as more space or rooms, have plenty of competition. Amid incredibly low inventory levels, many eager home shoppers make an offer in mere days, and 12% of buyers are even willing to purchase a home sight-unseen . Tools like 3D Home tours , which are becoming more and more popular, help buyers make those decisions more quickly.

The most expensive homes ( $488,000 and up) are staying on the market the longest, going under agreement in 33 days, one factor driving up median list prices as expensive homes stay on the market longer than less expensive ones. Homes at the top of the market commonly take longer to sell than less expensive homes, with fewer buyers in that price range. But, despite lingering economic and unemployment uncertainty, homes at the top of the market are still selling two weeks quicker than the same time last year.

“Normally, the housing market begins to slow down around this time of year as the weather cools and buyer activity fades, but it’s 2020, and nothing is normal this year,” said Zillow senior economist Chris Glynn . “Instead of slowing down, we’re seeing the housing market continue to speed up as Autumn continues. The buying season we’re seeing this fall more closely resembles peak market activity we’d see in the spring in a typical year. It remains to be seen whether the ‘traditional’ buying season continues to be pushed back because of Covid-19 and activity will taper off in coming months, or whether historically low inventory and continued strong demand mean homes will continue to sell incredibly quickly through the rest of the year.”

The days-on-market spread between the most and least expensive homes is tightening, signaling broad demand. During a normal year, that spread is typically tightest in May and widens by about 10 days by September. However, in yet another example of unusual seasonal trends, it only took five more days in September to sell the most-expensive homes than it did in May, about half of what is usually expected for this time of year.

In many metropolitan areas, the spread between days on market for the most and least expensive homes is even tighter. There was essentially no difference in days on market between the top and bottom price tiers in the Salt Lake City , Seattle , Pittsburgh , and San Francisco areas, where the bottom of the market sold just two days faster than the top.

Among the 50 largest markets, homes sold fastest in Columbus , Cincinnati , Kansas City and Indianapolis — all going under contract in five days or less. The metros seeing most days on market are Nashville (36 days), New York (28), Virginia Beach (28), and San Antonio (27). Buffalo is the only market seeing the opposite trend, where the most expensive homes sold 34 days faster than the most affordable.

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Homeowners throughout Southern California can now sell their home to the most trusted name in real estate. Zillow Offers, launched on December 9, lets sellers skip the hassle of listing their home by selling directly to Zillow.

Zillow Offers is now available to homeowners across a large portion of Southern California including the Inland Empire (Riverside) and San Diego. In just 19 months since Zillow Offers first launched in Phoenix, it has grown to a total of 221 markets across the country – with Los Angeles, the nation’s 2nd largest housing market, representing the largest market where Zillow Offers is available to-date.

Selling a home is a major life experience, full of emotions and significant financial implications. Most (64%) home sellers are also looking to buy a home at the same time, and uncertainty around the timing of a sale and price cause the most stress for them2. With Zillow Offers, sellers have control over their timeline and can choose the close date that fits their schedule. Sellers also don’t have to deal with making repairs or improvements to get their homes sale-ready, a stressful prospect for more than half of sellers2.

Homeowners who request an offer from Zillow can expect a fair market value offer on their home. A recent Zillow analysis found that sellers who declined a Zillow Offer and went on to sell traditionally within the next few months sold their homes for an average of just 0.22 percent more than Zillow’s offer.

Homes in the Los Angeles metro now take about a week longer to sell than they did a year ago, and local home value appreciation is nearly flat over the past year3. Zillow Offers provides another choice for sellers looking at all of their options to sell their homes.

Homeowners interested in Zillow Offers can simply enter their address on Zillow’s website or app and answer some basic questions about their home. If eligible, they will receive a preliminary cash offer within about 48 hours. Potential sellers don’t have to make any binding decisions until their home has been evaluated by a Zillow representative in person. Zillow has dedicated support from English- and Spanish-speaking representatives to help sellers through the process.

After closing on a home, Zillow will take care of necessary repairs, working with local contractors to complete projects like a fresh coat of paint, servicing HVAC units and other work a typical homeowner would do to get their home ready for sale.

“We know how difficult and stressful it can be to sell a home, so we are rebuilding the experience of buying and selling a home to make it a much simpler, smoother process,” said Jeremy Wacksman, Zillow Brand President. “In the 20 months since we first introduced Zillow Offers, we’ve seen that there is a strong appetite for another option when it comes to selling a home. We’re thrilled to launch Zillow Offers in one of the largest markets in the country, and look forward to easing the friction and helping sellers move to the next stage of their life without the hassle and uncertainty of a traditional home sale.”

“I needed extra funding to work on my movie, and needed to sell my property in Las Vegas,” said James Su of Arcadia, Calif., who sold his home in July 2018. “The whole process of selling through Zillow Offers was so easy. From start to finish, there were no surprises, and I didn’t have to deal with all the troubles that are associated with selling a home. Zillow made the stressful undertaking of selling a home much smoother and easier, and fast enough to use the proceeds to fund my movie.”

As Zillow works to build a seamless, integrated real estate transaction, consumers can get financing from Zillow’s owned affiliate lender, Zillow Home Loans, making it simpler for Zillow Offers buyers and sellers to get pre-approved for their next home purchase.

Zillow has also announced that the home-selling service will be coming to Cincinnati, Jacksonville, Fla., Oklahoma City and Tucson, Ariz. by the middle of 2020.

A Los Angeles-based broker will represent Zillow in each transaction when buying or selling a home. Home sellers who request a Zillow offer but decide to sell traditionally can be connected with a local real estate agent to represent them in the sale.

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