Southern California homes are so unaffordable that sales activity has crashed to a pace even slower than the real estate-wrecking Great Recession.
The homebuying data firm Attom just revised its sales statistics dating back to 2005, using new methods to sort out what, from public records, is a true home sale. These totals include closed transactions for houses and condos, both existing and newly built.
My trusty spreadsheet analyzed the newly retooled Southern California numbers through July 2026. Sales are still scraping the bottom, and the few buyers who close a purchase are paying near-record high prices.
So, how sluggish are sales across the six counties, based on closed transactions in the 12 months ended in July?
– 33% slower than the average homebuying pace seen since 2005.
– It’s the second-slowest pace in that period. The slowest was May 2026.
– Almost as stunningly: July was 3% slower than the worst days of the late 2000s’ real estate crash.
Southern California’s latest sales crash conditions have endured for three years. Contemplate the 25 slowest-selling individual months in the past 21 years.
Seven occurred as global financial markets collapsed in 2007-08. May 2020 was another, during pandemic lockdowns.
And 17 have happened since 2023.
It’s no secret that Southern California homes have been financially out of reach for most buyers for years.
More recently, a shaky local economy has weakened most house hunters’ confidence to overpay, especially when renting seems more budget-friendly for many households.
The price is wrong
Why are buyers staying away? The answer is simple.
July’s median price hit $815,000, Southern California’s fourth-highest ever and just 2% below the all-time record.
High prices don’t prove a resilient market, no matter what the industry gurus say. They’re a major problem, and wannabe sellers hopefully know it.
Consider how few households could afford to buy this past spring in the six local counties, according to math from the California Association of Realtors: 15% in Orange, 17% in Los Angeles and San Diego, 19% in Ventura, 28% in Riverside, and 34% in San Bernardino.
The rare bright spot for buyers is that price gains have cooled. Since 2023, Southern California prices have risen just 2% a year, compared with 7% a year in the decade before.
But slower appreciation can also spook aspiring buyers. The prospect of big future gains often motivates people to buy in the first place.
The monthly headache
Let’s get to what buyers really care about: the monthly payment.
Southern California’s cost burden, estimated using current mortgage rates, median prices, property taxes, home insurance, and mortgage insurance, is $6,883 per month. That payment has doubled in five years.
Yes, the Federal Reserve ending its cheap-money policy in 2022 is among the culprits. But nobody complained when the Fed pushed mortgage rates to record lows over the previous three years.
Plus, don’t forget the $81,000 a Southern California house hunter needed in cash for the 10% down payment assumed in this payment calculation.
These steep homebuying expenses feel more painful when the alternative is renting, even if ownership has its perks.
A typical Southern California renter, using Zillow estimates for apartment and house rental costs, paid about $2,860 per month in July. That’s 58% less than the estimated house payment.
By the way, the average 30-year fixed-rate mortgage in July was 6.5%. It was 7.3% in mid-October.
Do you think such a cost jump, which cut a house hunter’s buying power by 8%, improved homebuying conditions?
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
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