A report released recently by CoreLogic shows that home sales in Southern California have dropped 7.5% in November compared to October of 2017, which reflects a broad slowdown in the housing market.

November was the third consecutive month of declines and the almost 21,000 homes sold were the lowest since 2011 prior to when the housing market began its upswing. Real estate agents blame the sale declines on buyers that are unable to afford the rising mortgage rates and multiple years of steady price increases. Buyers that are able to pay more are fearful of investing money in what may be at the top of the market. All of this results in homes sitting on the market longer with sellers reducing prices.

Seventeen percent of Los Angeles County listings on Zillow had at least one price reduction in October, which is the greatest percentage in the last eight years. The number of listings was also up 30.5%. Luckily, the cooling is just a pull-back from the formerly hot housing market and not a complete drop off.

CoreLogic said the median home price in Southern California’s six-county region rose 6.1% from a year earlier to $525,000, however the gains are slowing. Without a recession, economists doubt prices will decline on a year-over-year basis, while others disagree arguing that homes prices are simply out of synch with incomes.

Mike Fratantoni, chief economist for the Mortgage Bankers Association, said the following:

Home prices had galloped ahead of wage growth for too long, particularly in the coastal markets, and this is a healthy deceleration in the market.

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