Recently, the pace of homebuying in Southern California has hit levels more sluggish than during the Great Recession. Sales are approaching historic lows, yet prices are still close to their peak.
Attom, a real estate data company, has updated its sales data, going back to 2005. They’ve used new ways to spot actual transactions in public records.
Business columnist Jonathan Lansner from the Los Angeles Daily News took a close look at the numbers through July 2026. He found that home sales are exceptionally low, and those who do manage to buy are paying record prices.
The revised figures include sales of both existing homes and newly constructed houses and condos. Over six Southern California counties, home sales in the year ending July were down 33% from the average annual pace seen since 2005.
Lansner pointed out that this marks the second-slowest 12-month span for home sales in over twenty years, with only May 2026 recording fewer sales. Interestingly, the sales pace in July was even 3% slower than during the most challenging period of the housing market crash in the late 2000s.
Now, it seems the region’s housing market has been in a real slump for three years, with sales figures that have rarely been this low in the past two decades. Of the 25 months with the lowest home sales over the last 21 years, an astonishing 17 have occurred since 2023. For context, seven of the slowest months happened during the financial crisis of 2007-2008, while one instance occurred in May 2020, during the early pandemic restrictions.
As of July, the average home price in Southern California stood at $815,000, which is the fourth-highest amount recorded there, just 2% shy of the all-time high.
This slowdown isn’t surprising given that homeownership has become unaffordable for many. High prices, steep mortgage rates, and uncertainty about the local economy discourage potential buyers, with many opting to rent instead.
Despite the sales downturn, home prices seem to resist falling. This median price of $815,000 significantly limits access to homeownership for many households. For instance, only about 15% of households in Orange County could afford to buy a home this past spring. In Los Angeles and San Diego counties, that figure was around 17%, and it ranged from 19% in Ventura to 34% in San Bernardino County.
Interestingly, there’s been a slight easing in the rate of price increases. Since 2023, home values in Southern California have grown about 2% annually, a sharp contrast to the 7% average bump seen over the previous decade.
This change presents its own challenges. Buyers who used to see real estate as a quick investment may now hesitate to commit to making such a significant financial move.
Beyond purchase prices, maintaining a mortgage adds another layer of difficulty. For example, someone buying a median-priced home might face a monthly housing payment of roughly $5,765. This sum covers mortgage payments, property taxes, insurance, and mortgage insurance—essentially a hefty 72% increase over the past five years.
The Federal Reserve’s rise in interest rates starting in 2022 has heavily influenced borrowing costs after a period of historically low mortgage rates.
In addition to the heavy monthly payments, potential buyers typically need around $81,500 upfront to secure a 10% down payment on a median home.
Renting remains a markedly cheaper option. Estimates suggest the average monthly rent for a house or apartment in Southern California was about $2,860 in July, which is significantly less than what it costs to purchase a home.
Mortgage rates further complicate the situation. As of July, the average rate for a 30-year fixed mortgage was 6.5%, increasing to 7.3% by mid-October. This rise has diminished prospective buyers’ purchasing capability by around 8%, adding to the challenges in an already costly housing market.
