In May 2024, home prices in Southern California saw a slight annual decline of 0.2%, marking the first decrease since July 2023. Influenced by high mortgage rates and economic uncertainties, the average home price fell to $876,044. Inventory levels increased significantly, with a 38% rise in homes for sale in Los Angeles County. Many existing homeowners want to sell, yet first-time buyers struggle to enter the market. Zillow expects home prices could decline slightly further, projecting a 1.1% drop in the Los Angeles-Orange County region by May 2026, provided the economy avoids recession.
Southern California home prices experienced the first annual decline since July 2023, with a drop of 0.2% from May 2024, influenced by economic uncertainties and rising inventory.
Home prices fell from an average of $876,044 in May 2024, marking a shift in a market previously aided by low inventory and pandemic-era mortgage rates.
While existing homeowners are looking to move, first-time buyers remain unable to enter the market due to high mortgage rates, highlighting the disconnect currently present.
Zillow predicts only a slight decline in home prices as they estimate a 1.1% decrease by May 2026, assuming the economy avoids recession.
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