Los Angeles, Orange County Homebuyers Slump to Second-Lowest Sales on Record – Orange County Register

Homebuying in Los Angeles and Orange County fell 24% in a year as high home payments terrified potential buyers.

Sales of existing and new construction homes and condos totaled 7,458 units in both counties in May, according to CoreLogic. A 17% month-on-month increase, but a 24% year-on-year decrease.

So how late?

• May had the second lowest sales on record until 1988.
• The month has the 47th lowest total sales in the last 35 years, with only 11% of all months showing a decline in sales.
• That’s 39% below the average May sales pace since 1988.
• Sales in the last 12 months were 112,483 units, 34% below average.
• Lowest 12-month sales since March 2009.
• Only 2.4% of all 12-month periods slowed down.

It’s been over a year since the Federal Reserve started raising rates to cool the overheated economy. housing has become unaffordable Purchasing power declined by 12% over the year due to high mortgage rates. Economic instability has also dampened enthusiasm for housing.

That is, in six counties in the Southern California area, Sales decreased by 26% to 16,350 units in one year The median selling price fell 3.8% to $715,000.

foundation

Let’s take an inside look at the LA-OC market from May sales figures.

Los Angeles County’s business closures stood at 5,154, up 18% in one month and down 24% in one year. Orange County sales were 2,304 units, up 16% in a month and down 22% in a year.

Note: Average May month-to-month sales increased 6.1% in LA and 6% in OC.

Now consider how the price fluctuated.

In Los Angeles County, the median $800,000 remained flat over the month and declined 6% over the year. It’s also 7% off the all-time high of $860,000 set in April 2022.

Orange County’s median $1 million rose 1.2% over the month, but was down 4.8% from its May 2022 peak of $1.05 million.

Since 1988, May prices have risen 1.1% in Los Angeles and 1.7% in Ohio.

pain of payment

Soaring loan prices are a factor behind the slump. The average 30-year mortgage rate was 6.43% in May, compared with 5.23% 12 months ago.

According to my trusty spreadsheet, Los Angeles County buyers have a 7% higher estimated home payment of $4,016 per month for the median $800,000 home versus $3,764 for the one-year-old $854,000 home. I know what I’m getting. This assumes he has $160,000 as a 20% down payment.

In Orange County, buyers got an 8% higher payout of $5,020 a month for a median $1 million home and $4,628 a month for a one-year-old $1,054,000 home. The down payment he made was $200,000 or 20%.

detached house

sale: Los Angeles’ 3,597 transactions increased 15% in one month and decreased 24% in one year. 1,426 OC deals increased 19% over the month and decreased 24% over the year.

price: LA’s median price was $865,000, up 2% in a month and down 7% in a year. His median OC was $1.2 million, up 4% over the month and flat over the year.

condominium

sale: 1,263 units were sold in Los Angeles, up 25% over the month, but down 26% over the year. 714 OCs sold, up 24% in one month, but down 18% in one year.

price: LA’s median price was $666,000, up 1% in a month, but down 5% in a year. The median OC was $724,000, down 1% over the month, but down 3% over the year.

new house

sale: A builder in Los Angeles has sold 206 units. Over the month he increased by 26%, but over the year he decreased by 27%. 163 new homes were sold in the OC, down 19% in one month and down 25% in one year.

price: The median price for a new home in Los Angeles was $858,500, down 13.3% in a month, but up 6% in a year. The median $1 million OC was down 12% over the month and 24% over the year.

Builder share: New homes in LA accounted for 4% of all deals last month, compared with 4.2% 12 months ago. OC’s share was 7.1% last month, compared to 7.3% 12 months ago.

Jonathan Lanzner is a business columnist for the Southern California News Group. You can contact him by: jlansner@scng.com