The number of homes sold in Southern California fell sharply in May, as a coronavirus outbreak froze the region’s housing market.
Data released Thursday by DQNews reflects an agreement that closes escrow, which means most buyers place their offers in April and even March, during the peak period of stay at home orders.
Sales that closed in May dropped 45% from a year earlier, while the average home price in the region rose 2.7%.
Experts say home sales usually fall before prices fall on the market, because sellers are reluctant to reduce prices until they have to do it.
When coronavirus outbreaks became an increasing concern, many sellers also withdrew their homes from the market, further limiting supply and making prices smaller.
However, some indications of price movements are clearly visible.
Although the average selling price in the region – the point where half the houses are sold more and half is cheaper – rose again compared to last year, it dropped 1.2% from April.
The 2.7% increase from year to year is also smaller than the 4.3% increase in April or 6.8% increase in March.
Here’s how the sales and house prices are broken down by county in May:
- In Los Angeles County, sales fell 49.5% from a year earlier, while the average selling price rose 1.6% to $ 620,000.
- In Orange County, sales fell 50.6%, while prices rose 4.2% to $ 750,000.
- In Riverside County, sales fell 43.7%, while prices rose 6.5% to $ 415,000.
- In San Bernardino County, sales fell 33.9%, while prices rose 6.7% to $ 368,000.
- In San Diego County, sales fell 40.7%, while prices rose 3.5% to $ 590,000.
- In Ventura County, sales fell 49.4%, while prices dropped 1.7% to $ 580,000.
The overall economic direction will probably play a big role in whether house prices soften further. Business was reopened and more people were roaming outside when the government lifted restrictions on staying at home.
Data covering a slower period than those released by DQNews shows a reopening can be seen in the housing market too, although, as with the economy in general, any recovery is still in its infancy.
According to Redfin online brokerage, the number of houses in L.A. County entering escrow in the four weeks ended June 7 is 28% higher than the low point at the end of April, but still 32% below the previous year’s level.
