Homebuying cooling? LA County house hunters buy less, pay less

The homebuying binge cooled in October as Los Angeles County house hunters bought less and paid less.

Now Southern California’s six-county median sales price also hit another record high in October — the 13th of the pandemic era — despite slowing sales, according to DQNews. Low mortgage rates and an appetite for larger living quarters pushed up prices though affordability questions may be cooling the buying pace.

Across the region, 22,837 homes sold, down 5.1% for the month, down 6.6% in a year. Median sales price was record $690,000 — up 0.4% for the month, up 14% in a year.

As for Los Angeles County, here is a baker’s dozen of must-watch trends my trusty spreadsheet found within the DQNews report on closed transactions from October …

1. Sales: 7,528 existing and new residences sold, down 3% from September and down 1% from October 2020.

2. Context: This was the 16th busiest October of the 34 since 1988. Last month was 10% above the 10-year average buying pace for October.

Since 1988, a typical October sees a one-month sales drop 47% of the time with an average 1% increase from September.

3. Past 12 months? 90,087 Los Angeles County purchases — 31% above the previous 12 months and 17% above the 10-year average.

4. Prices: The countywide $790,000 median for all homes — down 0.6% in a month and up 10% over 12 months. Record high? $795,000 set in July September.

5. Context: Over 10 years, price gains averaged 10.2% annually. The latest performance tops 70% of all 12-month periods since 1988.

6. Pandemic era? 10 price records broken since February 2020. The median’s $150,000 increase equals a $10.25 gain every hour over these 20 months.

Here’s a look into key slices of Los Angeles County’s market in October …

7. Existing single-family houses: 5,038 sold, down 3% in a year. Median of $850,000 — a 9% increase over 12 months.

8. Existing condos: 2,132 sales, up 3% over 12 months. Median of $650,000 — a 14% increase in a year.

9. Newly built: Builders sold 358 new homes, up 8% in a year. Median of $881,500 — a 14% increase over 12 months.

10. Builder share: 4.8% of sales vs. 4.4% a year earlier. Los Angeles County builders’ slice of the market ranks No. 5 among SoCal’s six counties.

And the bigger picture …

11. Rates: How cheap is money? Rates on a 30-year, fixed-rate mortgage averaged 2.94% in the three months ending in October vs. 3.6% in February 2020, just before the pandemic struck. That translates to 9% more buying power for house hunters.

At these rates, a buyer with 20% down would pay $2,643 a month on the $790,000 sale vs. $2,256 on February 2020’s $620,000 median. So during the pandemic era, sale prices rose 27% but just 17% for a theoretical house payment.

12. Supply: The plight of house hunters isn’t pretty. According to the California Association of Realtors, Southern California’s inventory of homes for sale in October equaled 1.8 months of sales — down from two months a year earlier. Homes went from listing to escrow in 11 days, up from nine days in October 2020.

13. Affordability: Just 26% of households in Los Angeles and Orange counties could afford a median-price house in the third quarter — down from 31% a year earlier, Realtor stats show. In the Inland Empire, affordability was 36% vs. 42% in the summer of 2020.

Around Southern California, sales fell in all six counties from September to October while prices rose in a trio of them. The details …

Los Angeles County: 7,528 sold, down 2.7% for the month, down 0.9% in a year. Median was $790,000 — down 0.6% for the month, but up 10.5% in a year.

Orange County: 3,257 sales, down 6.1% for the month, down 13.6% in a year. Median was record $920,000 — up 3.4% for the month, up 15.7% in a year.

Riverside County: 4,093 sales, down 5.5% for the month, down 6% in a year. Median was record $535,000 — up 1.5% for the month, up 20.2% in a year.

San Bernardino County: 3,129 sold, down 4.2% for the month, down 5.3% in a year. Median was record-tying $465,000 — up 0.1% for the month, up 16.3% in a year.

San Diego County: 3,755 purchases, down 9.5% for the month, down 12.4% in a year. Median was $740,000 — flat for the month, up 13.8% in a year.

Ventura County: 1,075 sold, down 3.7% for the month, down 6.5% in a year. Median was $725,000 — flat for the month, up 10.7% in a year.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com