Southern California home prices in January posted their smallest year-over-year gain in more than a year, as the housing market showed signs of slowing.
The median home price in the six-county Southland rose 18.4% from a year earlier to $380,000, the smallest increase since November 2012, research firm DataQuick said Wednesday. Sales also fell 9.9% compared to last year.
A total of 14,471 new and resale condos and houses changed hands last month — the lowest level for a January since 2011, indicating tight inventory and declining affordability have handcuffed buyers.
“The economy is growing, but Southland home sales have fallen on a year-over-year basis for four consecutive months now and remain well below average. Why? We’re still putting a lot of the blame on the low inventory,” DataQuick President John Walsh said in a statement. “But mortgage availability, the rise in interest rates and higher home prices matter too.”
Compared to December, the median price fell 3.8%. Because the median price is the point at which half the homes sold for more and half for less, such a drop from December isn’t unusual, DataQuick says.
Buyers likely signed a contract around the holidays in order to close a sale in January. Many families back out of the market around the holidays, slowing the market and giving investors a larger role. Since, investors usually target more affordable homes, that can help bring the median price down.
The share of investor purchases inched up last month. Absentee buyers–mostly investors and some second-home purchasers–scooped up 27.5% of all homes sold in January. That’s compared to 27.2% in December.
Sales fell from a year earlier in all six counties: Los Angeles, Orange, San Bernardino, Riverside, Ventura and San Diego. Los Angeles County saw the smallest decline, as buyers purchased 7.4% fewer homes last month.