Home prices in the first quarter rose 19.1% compared to a year ago and were 4.2% higher than in the fourth quarter of 2021. It appears as if the spike in mortgage rates during the first quarter has not dampened the market and, with more buyers than sellers, the market is still extremely hot.  The region saw double-digit price growth across the board, with Orange County again leading the way.

Of note is that home prices in Riverside County rose 10.7% compared to the prior quarter.  Rising mortgage rates and prices are certain to push affordability down even further, which is concerning. The question remains whether rising financing costs will start to slow the market. For the time being, this does not appear to be the case.

   In the first quarter of the year, the average time it took to sell a home in the region was 22 days, which was 6 fewer days than a year ago but 1 day longer than in the final quarter of 2021.  Homes in San Diego County continue to sell at a faster rate than other markets in the region. In the fourth quarter, it took an average of 16 days to sell a home there—two fewer days than it took a year ago.

The other four counties also saw the time it took to sell drop compared to a year ago, but market time rose very modestly in Riverside, Los Angeles, and San Bernardino counties compared to the fourth quarter of 2021.  Limited inventory combined with growing buyer demand is creating a very tight market. Any increases we see in the number of homes for sale in the coming months is not likely to be enough to satisfy buyers.

Despite low inventory levels and rising mortgage rates, the housing market continues to perform very well in Southern California. The spike in mortgage rates has yet to have a significant impact on price growth or demand; however, it will be interesting to check back in the second quarter because if there is an impact, that’s when we would likely see it.

If you find yourself wanting to purchase in California, give family owned and operated Sun Pacific Mortgage a call now at 707-523-2099 or visit our website at www.sunpacificmortgage.com. We can quickly get you pre-approved so you can present yourself as a serious Buyer when you make your offer to that Seller!  We have been a private mortgage lending company, servicing all of California for the past 34+ years – and are here to help get you that dream home!

Note:  Credit for this article goes to Chief Economist for Windermere Real Estate, Matthew Gardner who is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level.