Southern California home prices fall nearly 1% in June

Southern California home prices dropped in June, marking the second consecutive month that values declined from a year earlier.

In June, the average home price across the six-county Southern California region fell 0.2% from May to $875,128, according to data from Zillow. Prices were down 0.9% from June 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 in June followed a similar drop in May. Before that, prices hadn’t fallen on an annual basis since July 2023.

Back then, home prices were falling because rising mortgage rates knocked many buyers out of the market. Values started increasing again when the number of homes for sale plunged as sellers also backed away, unwilling to give up mortgages they took out during the pandemic with rates of 3% and lower.

The inventory picture, however, is changing.

In June, there were 35% more homes for sale than a year earlier in Los Angeles County, with similar increases seen elsewhere in Southern California.

Real estate agents say current homeowners increasingly want 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 for home prices to decline only slightly. By June 2026, the real estate firm expects home prices in the Los Angeles-Orange County metro region to be 1.5% lower than they are now.

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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 rent increases 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 zones.

A recent L.A. Times analysis of Zillow data found that in ZIP Codes closest to the fires, rents rose more than in the rest of the county from December to April.

Other data sources show similar trends.

In Santa Monica, which borders the hard-hit Pacific Palisades neighborhood, the median rent rose 4.1% in June from a year earlier, according to data from Apartment List.

Across Los Angeles, which includes the Palisades and many neighborhoods not adjacent to any fire, rents dropped 0.85% last month.

Apartment List does not have data for Altadena, but it does for the adjacent city of Pasadena. Rents there rose 5.4% in June from a year earlier.