Southern California Real Estate Market Trends

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Q2

2021

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Our Southern California real estate market data is updated quarterly to aid in your real estate forecasts. Historical California real estate data and trends are included below the latest update. We break down our data by county, but we cover major cities in the SoCal area including Los Angeles, San Diego, Riverside, and Anaheim.

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Q2 2021 Gardner Report

Southern California
Real Estate Market Update

by Matthew Gardner

Below is the latest Southern California housing market trends analysis. Additional links:

Historical Southern California Data
Northern California Data
Hawaii Data
Other Regional Data

 

The following analysis of the Southern California real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact your Windermere Real Estate agent.

 

Regional Economic Overview

Despite a decrease in employment levels last winter, Southern California saw a decent job recovery between May 2020 and February 2021. However, it appears we lost some momentum as COVID-19 cases started to rise again, specifically in Los Angeles County. Although the region has recovered 1.28 million of the 2.02 million jobs that were shed during the pandemic, the region is still more than 720,000 jobs shy of the pre-COVID peak. That said, the region’s unemployment rate in June was 8.8%, down significantly from 15.5% a year ago. Data at the end of the second quarter showed the lowest jobless rates were in Orange (6.4%) and San Diego (7%) counties. The highest rate was, unsurprisingly, in Los Angeles County, where it was 10.5%.

southern california Home Sales

❱ The housing market continued its upward swing, with 52,792 home sales closing in the second quarter, which was a year-over-year increase of 70.5%. However, I would caution not to read too much into this growth rate as COVID-19 heavily impacted sales in the second quarter of last year.

❱ Pending home sales, which are an indicator of future closings, were 10.9% higher than in the first quarter of this year, suggesting that closings in the third quarter will be positive.

❱ Home sales increased across the board, with closings rising in all markets by more than 40%. Sales in Orange and Los Angeles counties nearly doubled.

❱ Listing activity continues to lag, with an average of only 14,747 homes for sale in the quarter. This is 41.8% lower than a year ago, and 6.2% higher than in the first quarter of 2021.

A bar graph showing the annual change in home sales for various counties in Southern California.

southern california Home Prices

A map showing the real estate market percentage changes in various counties in Southern California.

❱ The average home sale price in the region was $984,959. This was 35.7% higher than a year ago and 13.2% higher than in the first quarter of this year.

❱ Mortgage rates rose modestly in the first quarter, which likely got some would-be buyers off the fence. This additional demand, in concert with persistently low supply levels, resulted in significant price appreciation.

❱ The region saw double-digit price growth across all counties contained in this report. Annual prices were up more than 30% in all counties except Riverside—but they only just missed out. On average, prices were up more than $100,000 from the prior quarter.

❱ I still anticipate mortgage rates to rise as we move through the year, but the increase will be very modest. Although prices are expected to rise further, affordability constraints continue to grow, which at some point will slow the remarkable gains we have seen.

A bar graph showing the annual change in home sale prices for various counties in Southern California.

Days on Market

❱ In the second quarter of the year, the average time it took to sell a home in the region was only 19 days, which is 20 fewer days than a year ago and 9 fewer days than in the first quarter of 2021.

❱ All markets contained in this report saw the time it took to sell a house drop compared to both the second quarter of 2020 and the first quarter of this year.

❱ Homes in San Diego County continue to sell at a faster rate than other markets in the region. In the second quarter, it took an average of only 13 days to sell a home there. This is 9 fewer days than it took a year ago.

❱ Comparing days on market to a year ago is not that informative given that the pandemic was in full force then. What is of greater interest is that market time dropped from the first quarter of this year, indicating that conditions are very tight.

A bar graph showing the average days on market for homes in various counties in Southern California.

Conclusions

A speedometer graph indicating a seller's market in Southern California.

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Home sales and prices were all higher than in the first quarter of 2021, while the number of homes available to buy remained significantly lower. With solid demand in place, it is staunchly a seller’s market. However, with mortgage rates likely to rise in the coming year, and affordability constraints starting to tighten all markets except perhaps San Bernadino, the pace of price growth must slow at some point.

Even with the headwinds mentioned above, I have still chosen to move the needle a little more in favor of home sellers.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.

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Major So Cal cities covered in this report:

Los Angeles

San Diego

Long Beach

Anaheim

Santa Ana

Riverside

Chula Vista

Santa Clarita

San Bernardino

Garden Grove

Huntington Beach

Moreno Valley

Glendale

Irvine

Fontana

Lancaster

So Cal counties covered in this report:

Los Angeles

Orange

Riverside

San Bernadino

San Diego

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Gardner Report Archive

Southern California
Historical Reports

2021
Q1 2021 Southern California Market Trends

Q1 2021
POST | (PDF)

Q2 2021 Southern California Market Trends

Q2 2021
POST | (PDF)

2020
                    Southern California Real Estate Market Update

Q1 2020
POST | (PDF)

                    Southern California Real Estate Market Update

Q2 2020
POST | (PDF)

                    Southern California Real Estate Market Update

Q3 2020
POST | (PDF)

Q4 2020 Southern California Market Trends

Q4 2020
POST | (PDF)

2019
                    Southern California Real Estate Market Update

Q1 2019
POST | (PDF)

                    Southern California Real Estate Market Update

Q2 2019
POST | (PDF)

                    Southern California Real Estate Market Update

Q3 2019
POST | (PDF)

                    Southern California Real Estate Market Update

Q4 2019
POST | (PDF)

2018
                    Southern California Real Estate Market Update

Q1 2018
POST | (PDF)

Q2 2018
POST | (PDF)

                    Southern California Real Estate Market Update

Q3 2018
POST

                    Southern California Real Estate Market Update

Q4 2018
POST | (PDF)

2017
                    Southern California Real Estate Market Update

Q1 2017
POST | (PDF)

                    Southern California Real Estate Market Update

Q2 2017
POST | (PDF)

                    Southern California Real Estate Market Update

Q3 2017
POST | (PDF)

                    Southern California Real Estate Market Update

Q4 2017
POST | (PDF)

These Southern California real estate reports, data, forecasts, and market trends are provided for informational use. If you find it useful, please properly attribute this resource with a link. This region of California is also referred to as SoCal, LA, LA Metro, OC, and Silicon Beach.