As we step into 2024, the Southern California housing market presents a fascinating blend of challenges and opportunities. Amidst fluctuating economic conditions, experts have laid out a series of predictions that could shape the housing market in Southern California. In this blog post, we will take a deep dive into “5 Southern California Housing Market Predictions for 2024”, focusing specifically on the six counties that make up what we know as SOCAL, a region renowned for its vibrant real estate sector.
1. Rebound in Home Sales
The Southern California housing market is on the cusp of a significant transformation. After a period of slower activity, we’re now seeing indicators of a robust comeback. Key to this turnaround is the California Association of Realtors’ (C.A.R.) prediction of a 22.9% jump in existing single-family home sales for 2024. This represents a notable shift from the previous year’s subdued performance.
Several factors contribute to this optimistic forecast. A major one is the expected further easing of mortgage interest rates, influenced by slower economic growth and reduced inflation. Lower rates typically make home purchases more feasible, inviting more buyers into the market. This environment, along with a build-up of demand from buyers who previously delayed purchases due to high rates or economic uncertainties, sets the stage for a surge in sales.
Economic recovery and growing consumer confidence also play a vital role. Consumer sentiment often follows suit as the broader economy stabilizes, leading to increased home-buying activity. Additionally, a slight increase in home inventory is anticipated, offering more choices to buyers and further fueling the sales momentum.
The predicted sales rebound is a complex combination of economic trends, market dynamics, and consumer behavior, all coming together to energize the Southern California housing market in 2024.
2. Median Home Price Increase
While many areas of the country are experiencing a downward trend on home prices, Southern California is bucking the trend. In spite of a sharp increase in mortgage rates and a slow down in home sales, prices continue to rise. A report from the California Association of Realtors gives us a detailed view of where home prices are as of the last available report:
- Los Angeles County: The median sales price was $897,990, which indicated an increase of 7.3% from the previous year.
- Orange County: Leading in median sales price, Orange County reached $1,300,000, showing a year-over-year whopping increase of 18.2%.
- Riverside County: The median sales price in this county was $620,000, experiencing an increase of 6.9% compared to the previous year.
- San Bernardino County: This county saw a median sales price of $475,000, with an increase of 8.9% from the previous year.
- San Diego County: The median sales price in San Diego was $952,000, reflecting a year-over-year increase of 10.1%.
- Ventura County: Ventura’s median sales price was $902,500, showing a marginal increase of 4.9% from the previous year.
These figures highlight the varying market conditions across Southern California, with some counties experiencing significantly higher median price increases than others. The median sales prices are shaped by several factors, including local economic conditions, housing inventory, and buyer demand.
For more detailed information and insights into the Southern California housing market trends, you can refer to the sources from the California Association of Realtors, CoreLogic, and Norada Real Estate.
3. Inventory and Market Dynamics
Over the last couple of years, Southern California has been struggling with exceptionally low numbers of homes for sale, contributing to bidding frenzies despite rising interest rates and high housing prices. As of Dec 2023, the active home listings were approximately 2,229 in Orange County, about 7,913 in Los Angeles County, 3,830 in San Bernardino, and just over 5,300 in Riverside.
These inventory numbers all reflect an average of roughly 30% reduction in available homes from the year before. This shortage in inventory significantly impacts the housing market, driving up prices and creating a highly competitive environment for buyers.
The lack of available homes for sale starkly contrasts pre-pandemic levels, indicating a severe housing shortage in the region. This situation is expected to continue, contributing to the increasing home prices and intense market competition.
4. Southern California as a Hotspot
Southern California is shaping up to be a standout area in the housing market for several compelling reasons. According to Realtor.com’s forecast, Southern California is expected to see significant growth in both home prices and sales volume in 2024, outperforming the national average. This growth is attributed to a combination of factors such as limited inventory, strong demand from buyers, and regional advantages like prime location and ideal weather. Specifically, the top Southern Californian metros, including Oxnard, San Diego, Riverside, and Los Angeles, are predicted to experience sales growth of around 13.1% on average, compared to an average decline for other Californian metros.
The resilience of the Southern California housing market, even in the face of rising interest rates, is another key factor. Despite some challenges, the region has managed to maintain stable home prices. The market dynamics vary across different counties, with some, like Orange County, experiencing substantial year-over-year increases in median sold prices and others, like San Diego, facing challenges but still showing growth potential.
Apart from the economic and market factors, Southern California offers unique lifestyle and environmental advantages that attract buyers. The region boasts of scenic vistas, privacy, upscale amenities, and a mix of urban and nature-centric living environments.
The desirable location, favorable weather, price-value ratio, and expanding business opportunities make it an attractive market for buyers and investors. While the average house prices in Southern California are higher compared to other U.S. locations, they offer more privacy and larger lot sizes, presenting a better deal compared to other major cities worldwide.
These factors collectively contribute to Southern California’s status as a market leader and a hotspot in the real estate sector, offering promising opportunities for buyers, sellers, and investors in 2024 and beyond.
5. Advice for Buyers in 2024
For home buyers eyeing Southern California in 2024: You will need to approach the market with a well-thought-out strategy. The region’s housing market, noted for its robustness and growth potential, demands a mix of timely decision-making and savvy navigation of the competitive landscape. Here are some tips for those considering a purchase in this market:
Timing is Crucial: With predictions of increasing home prices, deciding when to buy becomes critical. The market suggests a continued rise in prices, so waiting too long might mean paying more. However, rushing into a purchase without proper preparation and research is also not advisable. Balance is key.
Understand the Competition: Southern California’s housing market is known for its competitiveness, especially in sought-after areas. Expect bidding wars in popular neighborhoods. Being prepared for this level of competition is crucial.
Financial Readiness: Ensure your finances are in order. This includes having a robust down payment, a good credit score, and pre-approval for a mortgage. In a competitive market, sellers are more likely to favor buyers who have their finances sorted and can move quickly.
Know the Market: Each area in Southern California has its unique market characteristics. Research the specific areas you’re interested in to understand price trends, inventory levels, and average time homes stay on the market. This knowledge can inform your decisions and negotiations.
Work with a Local Expert: Consider partnering with a real estate agent who deeply understands the Southern California market, particularly your desired area. They can provide invaluable insights, help you navigate the market, and potentially get access to listings before they hit the open market.
Be Ready to Act: In a fast-moving market, hesitation can mean missing out on the right property. Be prepared to make quick but informed decisions. This readiness involves having all necessary documents and finances in order and being available to view properties and make offers promptly.
Flexibility and Patience: While knowing what you want in a home is important, some flexibility can be beneficial in a competitive market. Also, patience is vital; finding the right home in Southern California’s dynamic market might take time.
You can navigate the Southern California housing market more effectively in 2024 by being strategic, well-informed, and prepared. Remember, this market requires a blend of quick action and thoughtful planning.
Bottom Line
The Southern California housing market in 2024 is shaping up to provide a combination of opportunity, growth, and resilience. While challenges exist, the potential for significant gains in home values and sales volume cannot be ignored. Buyers and investors willing to navigate this market with careful planning and strategic action are likely to find rewarding opportunities. Whether you’re a first-time homebuyer or a seasoned investor, Southern California’s housing market in 2024 demands attention and consideration.
If you would like the guidance of an expert with years of experience in the Southern California market, I am happy to help. Feel free to contact me at (909) 915-9581, and I’ll help you make sure that your next home purchase is a successful one!
