Housing Tracker: Southern California home values dip in September

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Southern California home prices dropped again in September.It’s the fifth consecutive month that values declined from a year earlier.In September, the average home price across the six-county Southern California region fell 0.4% from August to $860,109, according to data from Zillow.

Prices were down 1.8% compared to September 2024.Economists and real estate agents say a variety of factors has slowed the market, including high mortgage rates, rising inventory and economic uncertainty stemming from tariffs.Until the recent declines, July 2023 was the last time that year-over-year prices had fallen.

Back then, rising mortgage rates were knocking many buyers out of the market.Values started increasing again when the number of homes for sale plunged as sellers backed away, unwilling to give up mortgages they took out earlier in the pandemic with rates of 3% and lower.The inventory picture, however, is changing.

In September, there were 23% more homes for sale than a year earlier in Los Angeles County, with similar increases elsewhere in Southern California.As more homes hit the market, sellers are trimming prices to make listings stand out.

Around 23% of listings in L.A.County had a price cut, compared to 20% a year earlier.Real estate agents say homeowners increasingly want to take the next step in their lives and are deciding to move rather than hold on to their ultra-low mortgage rates.

But many first-time buyers, without access to equity, remain locked out.Add on the economic uncertainty and you get a market that’s noticeably downshifted.If the Trump administration’s policies end up pushing the economy into a recession, some economists say home prices could drop much further.For now, Zillow is forecasting that the economy will avoid a recession and home prices will increase a year from now.

The real estate firm expects that by September 2026, home prices in the Los An...