California home sales on the decline, prices down in LA County

LOS ANGELES - Home prices declined across Los Angeles County in December 2023, mirroring a statewide trend, while statewide homes sales in 2023 experienced their steepest decline since 2007, the California Association of Realtors said Wednesday.

The median price of an existing single-family home in Los Angeles County in December was $853,340, down from $897,990 in November but higher than the $799,670 in December 2022. The median price for the Los Angeles metro area in December was $760,000, down from $785,000 in November but higher than the $716,500 in December 2022.

Orange County's median price was unchanged in December at $1.3 million, up from $1,131,760 one year ago.

Statewide, the median price of an existing single-family home was $819,740 in December, down slightly from $822,200 in November, but above the $770,490 in December of 2022.

The state's highest median home price in December was San Mateo County's $1.8 million.

December's sales pace was essentially unchanged from the revised 223,940 homes sold in November and was down 7.1% from a year ago, when a revised 241,070 homes were sold on an annualized basis. Sales of existing single-family homes in California have been below the 300,000 threshold since September 2022 and will likely stay below that level in the first quarter of 2024, CAR said.

For the year as a whole, the state recorded an annual sales level of 257,630, a decline of 24.8% from the revised sales level of 342,530 reported in 2022.

"The housing market had a tough year in 2023 as a shortage of homes for sale and high costs of borrowing continued to have a negative impact on housing inventory and demand," CAR President Melanie Barker said. "With mortgage rates expected to come down in the next 12 months, home sales will bounce back as buyers and sellers return to a more favorable housing market. Home prices should see a moderate increase in 2024 as well."

Sales in all major regions dipped in December on a year-over-year basis, including 6.2% in Southern California.

"Easing inflationary pressure and a soft economic outlook suggest that we will see some interest rate cuts in the upcoming year, which bode well for a housing market recovery," CAR Senior Vice President and Chief Economist Jordan Levine said.

"With rates declining to a 7-month low in late 2023, Americans are feeling more positive about the market, and we could begin to see some increase in market activity at the start of the year. The improvement is expected to be gradual as tight housing supply will remain the norm in 2024."