Quite low by historic standards
August marked the highest median price the region has seen since December 2007, but it was also the third straight month of single-digit annual gains after nearly two years of double-digit price growth.
In more expensive parts of the region, that growth has slown to a crawl, with the median price in Orange County climbing just 5.4%, to $590,000. Prices remain nearly 17% below their peak before the housing crash.
Economists and other market watchers say the slowdown is largely a matter of affordability. The glut of foreclosures and other distressed properties mostly burned off last year, removing lots of bargain-buying opportunities. Meanwhile incomes haven’t grown enough to push prices much higher, especially with lending conditions still tight.
“Prices are high enough to be a hurdle for a lot of potential buyers, even though mortgage rates have fallen in recent months,” said CoreLogic DataQuick analyst Andrew LePage. “And price isn’t the only impediment. Some still struggle to qualify for a loan or to mend their household finances in the wake of the Great Recession. Others are simply waiting for price appreciation to give them enough equity in their homes to make a move up.”
That’s one reason sales volume remains quite low by historic standards.