Are Southern California home prices finally beginning to crumble?

According to data from real estate tracker Attom, February’s $800,000 median sales price for the six-county region was down 2% compared with a year earlier. Attom tracks sales of houses and condos, both existing homes and newly constructed.

My trusty spreadsheet’s review of these statistics found that February’s price decline was the largest since May 2023.

Remember, February was before all the economic anxieties created by the Iranian conflict. Still, the business climate has been wobbly for many months, particularly as slow local hiring has weakened consumer confidence.

Despite the turbulence in the business climate, the upswing in local home prices continued through 2025. Before the 1% year-over-year dip in January 2026, prices hadn’t fallen for 31 months.

Yes, this price decrease is only a modest reversal. Even with the recent drops, the Southern California median price is a mere 4% below its June 2025 peak of $830,500.

Sales slump

It’s obvious that stubbornly high prices are turning away house hunters.

February’s 11,697 home sales across Southern California made it the third-slowest February in records dating to 2005 – behind only February 2008, amid a global financial meltdown, and February 2023, as mortgage rates jumped off record lows.

This February’s home purchases were 4% below the year-earlier level and 25% below February’s 22-year average.

It’s not a hiccup. Go back to early 2022, when the Federal Reserve ended its cheap-money policies that created record-low mortgage rates.

With all sorts of interest rates rising, the worst bout of inflation in four decades was dampened. Homebuying was cooled, too.

In the past four years, Southern California had 703,913 home sales. That’s 27% slower than the previous four years.

At the same time, home appreciation also chilled.

The Southern California median price rose 13% between 2022 and 2026, far slower than the 42% gain of 2018-22.

Payment puzzle

February’s sales weakness seems somewhat surprising, given that a Southern California buyer received more than just a price discount.

Mortgage rates were at their lowest since October 2022 as the Fed’s tight-money policies ended.

It’s been a wild ride for rates. The three-month average for 30-year, fixed-rate loans was 6.1% in February, according to Freddie Mac data. This rate metric reached 7.3% in November 2023, after falling below 3% in late 2020 and early 2021.

February’s theoretical buyer, financing the median-priced home at 6.1%, would have a $3,884 monthly house payment, assuming a 20% down payment. That’s the smallest buyer burden since June 2023.

Please note that this Southern Californian mortgage payment does not include other expenses such as property taxes, insurance, association fees or maintenance costs. And don’t forget the $160,000 down payment needed to get this payment.

The good news is that February’s estimated payment was down 9% year over year and is now 10% below the high of $4,336 in May 2024.

But there’s still a “but” here: The estimated monthly payment has ballooned by 101% in eight years. Who can afford that?

Plus, battles in oil-rich Iran have elevated inflation fears, driven higher gasoline prices and reignited mortgage rates, with averages up to 6.4% so far in April.

How these added financing expenses – plus wartime economic unease – translate to Southern California house hunting during the prime spring selling season is a giant question for the market.

Counting counties

February’s weak pricing and sales were patterns seen across much of the region. Here’s county-level performance, ranked by median sales price:

– Orange: $1.18 million median, off 2% in a year. Worst dip since May 2023, and 3% off the June 2025 peak of $1.21 million. Sales? 1,671 homes, the third-slowest February since 2005 – and down 4% in a year and 21% below average.

– Los Angeles: $882,875 February median, off 2% in a year. Worst since May 2023, 4% off June 2025’s peak of $918,000. Sales? 4,160 (No. 3 slowest February), off 7% in a year and 23% below average.

– San Diego: $872,000 February median, off 2% in a year. Worst since April 2023, 5% off June 2024’s peak of $914,000. Sales? 1,972 (No. 3 slowest February) – up 3% in a year but 22% below average.

– Ventura: $859,500 February median, off 2% in a year. Worst since August 2025, 3% off June 2025’s peak of $890,000. Sales? 506 (No. 5 slowest February) – up 20% in a year but 14% below average.

– Riverside: $592,000 February median, off 3% in a year. January 2026’s 4% drop was the worst since December 2011. The median is 3% off April 2025’s peak of $613,000. Sales? 2,119 (No. 3 slowest February), off 2% in a year and -26% below average.

– San Bernardino: $530,000 February median, flat in a year. October’s 2025’s 5% drop was the worst since June 2023. The median is 3% below October 2024’s peak of $549,000. Sales? 1,269 – the slowest February since 2005. It’s off 11% over the past year and 40% below average.

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

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