Home prices rose across the Southern California market in March, outpacing national gains. New listings increased in every major SoCal metro except San Diego. Although more sellers are choosing to list, the fresh inventory is getting snapped-up quickly as overall inventory remains tight.
Sales ebbed slightly as a result of limited new supply after a slow start to the year for sellers. An exception was in the Inland Empire, where a proliferation of new for-sale signs led more buyers to sign purchase contracts.
“In Southern California new listings spark interest from buyers who have been shopping without success and they catch the eye of a new crop of buyers” says Redfin chief economist Nela Richardson. “This means that more homes hitting the market can also mean more demand and competition.”
Generally, the Southland continued to be one of the nation’s most competitive markets for homebuyers. Here’s how it looked last month.
Los Angeles
Home prices in the Los Angeles metro area rose 8.3 percent in March from a year earlier to a median $509,000. The region continues to have some of the strongest price growth in the country, well above the national median of 4.7 percent.
Year over year, home sales flattened, stepping back from a three-month streak of solid market activity. Compared to February, however, March sales spiked 37 percent, the biggest monthly increase in a year.
“February was the calm before the storm,” Redfin real estate agent Sylva Khayalian said. “I saw overwhelming activity from sellers and buyers in March.”
L.A. buyers had more selection as the stockpile of homes for sale grew for the first time in almost a year, up 7.1 percent, buoyed by a bump in new sellers putting properties on the market.
That wasn’t enough to satisfy buyer demand, however. The supply of homes for sale fell from 3.4 months in February to only 2.7 months in March. Typically, a six-month supply signals a balanced market.
“While fresh inventory is coming on line from confident sellers, it’s simply not enough to satisfy buyer demand,” Khayalian said. “Intense bidding wars are once again the norm.”
Click here for L.A. trends and hot neighborhoods.
San Diego
In the San Diego metro area, home prices rose nearly 6 percent in March from a year earlier, to a median $487,000.
Home sales fell 2.5 percent, marking the second-straight month of year-over-year declines as fewer homeowners stepped up to the plate. The number of new listings fell 4.2 percent from a year earlier.
The inventory of homes for sale has been contracting for over a year, falling more than 14 percent over last year. With only a two-month supply of homes on the market, San Diego has one of the most supply-constrained housing markets in the country.
The remarkably low supply spells trouble for buyers since it intensifies competition and creates a vicious cycle of bidding wars that lead to higher prices on a limited stock of inventory.
Orange County
Home prices in the Orange County metro area rose nearly 6 percent in March from a year earlier, to a median $608,500. Sales fell 3.5 percent as frustrated buyers took a breather.
After months of hibernating, Orange County sellers were back in force. The number of new for-sale signs rose 14.4 percent from a year earlier, pushing the region’s inventory up more than 26 percent.
“Buyers have been waiting for fresh inventory to hit the market,” Redfin real estate agent Kim Rehnquist said. “But after spending months getting beat out in bidding wars, some buyers took a step back in March to see if they may have more homes to choose from this spring. More sellers are starting to list their homes, which buyers are hoping will alleviate the intense competition of the summer months.”
While more houses for sale meant a bigger selection for buyers, there was only a three-month supply of houses for sale in March, down slightly from 3.4 months in February.
Riverside-San Bernardino
Home prices rose nearly 6 percent and sales were up as the Inland Empire’s housing market continued its slow recovery. The typical home sold for $312,000 in March, a post-recession high. Prices have increased nearly 69 percent in the last five years.
Sales were up nearly 5 percent in March compared to a year earlier, as homeowners put more properties on the market.
The stockpile of homes on the market jumped more than 13 percent, driven by a wave of new sellers listing their homes. While scarcity was less of a problem than elsewhere in the Southland, growing demand is starting to pinch supply, which fell dramatically from nearly five months to less than four.
See Redfin’s data center to find out what’s happening in other cities.
NOTE: Totals for each region encompass the entire county. Data is based on listing information through March 31 and might not reflect all real estate activity in the market.
For more information, contact Redfin journalist services
Phone: 206-588-6863
Email: press@redfin.com
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