Are Southern California home prices finally beginning to crumble?<\/p>\n
According to data from real estate tracker Attom<\/a>, February\u2019s $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.<\/p>\n My trusty spreadsheet\u2019s review of these statistics found that February\u2019s price decline was the largest since May 2023.<\/p>\n 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<\/a> has weakened consumer confidence.<\/p>\n 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\u2019t fallen for 31 months.<\/p>\n 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.<\/p>\n Sales slump<\/p>\n It\u2019s obvious that stubbornly high prices are turning away house hunters.<\/p>\n February\u2019s 11,697 home sales across Southern California made it the third-slowest February in records dating to 2005 \u2013 behind only February 2008, amid a global financial meltdown, and February 2023, as mortgage rates jumped off record lows.<\/p>\n This February\u2019s home purchases were 4% below the year-earlier level and 25% below February\u2019s 22-year average.<\/p>\n It\u2019s not a hiccup. Go back to early 2022, when the Federal Reserve ended its cheap-money policies that created record-low mortgage rates.<\/p>\n With all sorts of interest rates rising, the worst bout of inflation in four decades was dampened.\u00a0Homebuying was cooled, too.<\/p>\n In the past four years, Southern California had 703,913 home sales. That\u2019s 27% slower than the previous four years.<\/p>\n At the same time, home appreciation also chilled.<\/p>\n The Southern California median price rose 13% between 2022 and 2026, far slower than the 42% gain of 2018-22.<\/p>\n Payment puzzle<\/p>\n February\u2019s sales weakness seems somewhat surprising, given that a Southern California buyer received more than just a price discount.<\/p>\n Mortgage rates were at their lowest since October 2022<\/a> as the Fed\u2019s tight-money policies ended.<\/p>\n It\u2019s 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.<\/p>\n February\u2019s theoretical buyer, financing the median-priced home at 6.1%, would have a $3,884 monthly house payment, assuming a 20% down payment. That\u2019s the smallest buyer burden since June 2023.<\/p>\n 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\u2019t forget the $160,000 down payment needed to get this payment.<\/p>\n The good news is that February\u2019s estimated payment was down 9% year over year and is now 10% below the high of $4,336 in May 2024.<\/p>\n But there\u2019s still a \u201cbut\u201d here: The estimated monthly payment has ballooned by 101% in eight years. Who can afford that?<\/p>\n 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.<\/p>\n How these added financing expenses \u2013 plus wartime economic unease<\/a> \u2013 translate to Southern California house hunting during the prime spring selling season is a giant question for the market<\/a>.<\/p>\n Counting counties<\/p>\n February\u2019s weak pricing and sales were patterns seen across much of the region. Here\u2019s county-level performance, ranked by median sales price:<\/p>\n \u2013 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 \u2013 and down 4% in a year and 21% below average.<\/p>\n \u2013 Los Angeles: $882,875 February median, off 2% in a year. Worst since May 2023, 4% off June 2025\u2019s peak of $918,000. Sales? 4,160 (No. 3 slowest February), off 7% in a year and 23% below average.<\/p>\n \u2013 San Diego: $872,000 February median, off 2% in a year. Worst since April 2023, 5% off June 2024\u2019s peak of $914,000. Sales? 1,972 (No. 3 slowest February) \u2013 up 3% in a year but 22% below average.<\/p>\n \u2013 Ventura: $859,500 February median, off 2% in a year. Worst since August 2025, 3% off June 2025\u2019s peak of $890,000. Sales? 506 (No. 5 slowest February) \u2013 up 20% in a year but 14% below average.<\/p>\n \u2013 Riverside: $592,000 February median, off 3% in a year. January 2026\u2019s 4% drop was the worst since December 2011. The median is 3% off April 2025\u2019s peak of $613,000. Sales? 2,119 (No. 3 slowest February), off 2% in a year and -26% below average.<\/p>\n \u2013 San Bernardino: $530,000 February median, flat in a year. October\u2019s 2025\u2019s 5% drop was the worst since June 2023. The median is 3% below October 2024\u2019s peak of $549,000. Sales? 1,269 \u2013 the slowest February since 2005. It\u2019s off 11% over the past year and 40% below average.<\/p>\n Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com<\/a><\/p>\n Follow local housing with our free \u201cHome Stretch\u201d email newsletter. SIGN UP HERE!<\/a><\/p>\n