Southern California's super red-hot housing market has started to cool in the past year. "The inventory is super low right now," said Dana Point realtor Gaetano Lo Grande. Across the Southland, home prices have been falling as interest rates have been climbing. From May 2022 to December 2022, prices have dropped 11% in Orange County, 10% in Los Angeles County, 8% in Riverside County, and 6% in San Bernardino County. "There were multiple offers on every home last year," said Lo Grande. "That is still the case now but very rare." While the housing market is cooling, that doesn't mean it is no longer competitive."From the perspective of buyers, yes, prices are falling but interest rates are a lot higher, which makes it harder to buy a home," said Jack Liebersohn, an assistant professor of economics at the University of California, Irvine. He added it is an unusual situation for prices to be falling as home sales are down.