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Southern California home prices declined slightly in May compared to a year earlier, the first annual drop since 2023.
In May, the average home price across the six-county Southern California region fell 0.07% from April to $876,044, according to data from Zillow. Prices were down 0.2% from May 2024.
Economists and real estate agents say a variety of factors have slowed the market, including high mortgage rates, rising inventory levels and economic uncertainty stemming from tariffs.
The year-over-year price decline last month marked the first since July 2023. At the time, home prices had been falling because rising mortgage rates knocked many buyers out of the market. Values started increasing again when the numbers of homes for sale plunged as sellers also backed away, not willing to give up mortgages they took out during the pandemic with rates of 3% and below.
The inventory picture, however, is changing.
In May, there were 38% more homes for sale than a year earlier in Los Angeles County, with similar increases seen elsewhere in Southern California.
Real estate agents say existing homeowners increasingly want to move rather than hold onto their ultra-low mortgage rates. But many first-time buyers, without access to equity, remain locked out.
Add 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 more.
For now, Zillow is forecasting the economy avoids a recession and for home prices to decline only slightly. By May 2026, the real estate firm expects home prices in the Los Angeles-Orange County metro region to be 1.1% lower than they are today.
Zillow Research, Times analysis
Note to readers
Welcome to the Los Angeles Times’ Real Estate Tracker. Every month we will publish a report with data on housing prices, mortgage rates and rental prices. Our reporters will explain what the new data mean for Los Angeles and surrounding areas and help you understand what you can expect to pay for an apartment or house. You can read last month’s real estate breakdown here.
Explore home prices and rents for May
Use the tables below to search for home sale prices and apartment rental prices by city, neighborhood and county.
Rental prices in Southern California
In 2024, asking rents for apartments in many parts of Southern California also ticked down, but the January fires in L.A. County could be upending the downward trend in some locations.
Housing analysts have said that rising vacancy levels since 2022 had forced landlords to accept less in rent. But the fires destroyed thousands of homes, suddenly thrusting many people into the rental market.
Most homes destroyed were single-family houses, and some housing and disaster recovery experts say they expect the largest increases in rent to be in larger units adjacent to burn areas in Pacific Palisades and Altadena, with upward pressure on rents diminishing for units that are smaller and farther away from the disaster zone.
A recent L.A. Times analysis of Zillow data found that in ZIP Codes closest to the fires rent rose more than the rest of the county between December and April.
Other data sources show similar trends.
In Santa Monica, which borders the hard-hit Pacific Palisades neighborhood, the median rent rose 5.1% in May from a year earlier, according to data from ApartmentList.
Across the entire city of Los Angeles, which includes the Palisades and many neighborhoods not adjacent to any fire, rents dropped 0.33% last month.
ApartmentList does not have data for Altadena, but it does for the adjacent city of Pasadena. Rents there rose 6.2% in May from a year earlier.
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Andrew Khouri, Phi Do
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