Housing Market Slows Down

The Southern California housing market hit a bump in the road in April, experiencing a year-over-year drop for the second time in 12 months.

Sales in the six-county region were down 3.2 percent compared with April 2016, Irvine-based CoreLogic reported its monthly report on the Southern California housing market, which was released Tuesday.

The last year-over-year sales dip in the region was an insignificant 0.1 drop last November. On the positive side, sales of new and resale houses and condominiums rose 4.2 percent from March, although year-over-year data is generally considered a more accurate gauge of whether the housing market is trending up or down.

One reason for the drop in sales was a substantial increase in prices. The median price of a single-family home in Southern California – the Inland Empire along with Los Angeles, Orange, San Diego and Ventura counties – was $458,000, a 6.8 percent increase compared with April 2015, according to CoreLogic.

In the Inland Empire, sales were down 1.8 percent in Riverside County and 2.9 percent in San Bernardino compared with one year earlier. Median prices were $330,000 in Riverside County and $270,000 in San Bernardino County, which represented drops of 6.5 percent and 6.3 percent respectively.

Higher prices might be driving investment buyers out of the market, and that could account for the sudden drop in sales, said Jay Prag, professor of economics and finance at the Drucker School of Management at Claremont Graduate University.

“I’ve been hearing that rumor from people in the housing industry,” said Prag, who said investment buyers have been a major factor in the Southern California housing market during the past few years. “With prices as high as they’re getting, buying a house isn’t as good of an investment as it was, so they’re getting out of the market for awhile.”