Housing Tracker: Southern California home values dip slightly in July

Southern California home prices fell 0.2% month-to-month in July to an average of $868,989 and were down 1.3% from July 2024. The July decline marked the third straight month of year-over-year decreases after prices had previously risen following a plunge in listings during the pandemic. Contributing factors include high mortgage rates, rising inventory, and economic uncertainty tied to tariffs. In Los Angeles County, listings increased about 30% year-over-year in July. Many homeowners are choosing to move despite low pandemic-era mortgages, while first-time buyers remain priced or equity-locked out. Zillow forecasts only a slight price decline through July 2026.

Back then, rising mortgage rates were knocking many buyers out of the market. Values started increasing again when the number of homes for sale plunged as sellers also backed away, unwilling to give up mortgages they took out during the pandemic with rates of 3% and lower. The inventory picture, however, is changing. In July, there were 30% more homes for sale than a year earlier in Los Angeles County, with similar increases seen elsewhere in Southern California.

Economists and real estate agents say a variety of factors has slowed the market, including high mortgage rates, rising inventory and economic uncertainty stemming from tariffs. Real estate agents say homeowners increasingly want to take the next step in their lives and are deciding to move rather than hold on to their ultra-low mortgage rates. But many first-time buyers, without access to equity, remain locked out. Add on the economic uncertainty, and you get a market that's noticeably downshifted.

If the Trump administration's policies end up pushing the economy into a recession, some economists say home prices could drop much further. For now, Zillow is forecasting that the economy will avoid a recession and that home prices will decline only slightly. The real estate firm expects that by July 2026, home prices in the Los Angeles-Orange County metro region will be 0.3% lower than they are now.

Read at Los Angeles Times