Southern California home prices are up nearly 16% in November from a year earlier, demonstrating that the market is still ultra-competitive despite a slight slowdown that started several months ago.

Some buyers held out bidding wars after a particularly hectic period last spring, but many buyers stayed on track, pushing prices to sequential new records in recent months.

The region’s average sales price in six counties hit a record high of $693,500 in November, according to data released Thursday by real estate company DQNews. That is 0.5% higher than in the previous month, October, and 15.6% higher than in November 2020. Sales increased by 1.8% compared to the same period a year earlier.

Some economists expect house price growth to slow to single-digit gains next year, in part because they expect mortgage rates to rise. That could happen sooner after the Federal Reserve announced more aggressive plans to fight inflation on Wednesday, but for now, average mortgage rates remain in the low 3% range.

In addition to historically low borrowing costs, several other factors continue to fuel today’s competitive market with rapidly rising prices. More millennials are looking to become first-time buyers, and investors are increasingly buying homes to rent or sell. In addition, many white-collar workers have prospered financially during the pandemic and have put some of their fast-growing stock portfolios into deposits.

The market is being pressured by the supply of homes for sale, which is at record lows. That leaves potential buyers at odds in bidding wars that see homes selling for tens, even hundreds of thousands, of dollars above list price.

The sharp price hikes are forcing some people to leave their communities to afford a home, moving from Los Angeles to San Bernardino and from San Bernardino all the way out of the state, to places like Arizona.

In November, the biggest year-on-year price increases were in Southland’s less expensive Riverside and San Bernardino counties, each of which hit new median home price records.

In Los Angeles and Orange counties, house prices in November fluctuated below the record levels reached in September and October respectively, but were significantly higher than in November 2020.

Many economists and housing policy experts say Southern California, and the nation as a whole, needs to build many more homes — both competitive and subsidized — if property and rent are to become more affordable. But developers say restrictive building and zoning laws, particularly in California, have long limited their ability to meet demand, and lately, supply chain issues have slowed some projects even more.

Whether relief is on the horizon for buyers remains to be seen.

In recent months, the market has cooled somewhat with brokers reporting that bidding wars are less intense but still common. Competition for homes typically slows down in the fall and winter, so it’s hard to know how much of the slowdown is due to normal seasonal patterns versus a market that will be better for buyers in the long run.

Selma Hepp, an economist at CoreLogic, said she now expected more of a slowdown in sales, noting that transactions usually fall between October and November, but fell less than usual this year.

The annual average price increase for all of Southern California, 15.6%, is lower than the 20% increase that was common months earlier this year, but it is also a few percentage points higher than a recent low of 12.6% in September .

This slight acceleration in year-on-year price increases over the past two months could indicate that the price increase is underway, but Hepp said it doesn’t believe it is. The pick-up is likely due to the sale of more upscale homes, pushing the median value slightly higher, rather than a real price acceleration, she said.

CoreLogic predicts that year-on-year home price growth will slow in 2022, reaching 1.9% in LA County by November next year. John Burns Real Estate Consulting also expects prices to fall into the high single digits next year.

A CoreLogic index seeking a more accurate – albeit delayed – picture of prices than the median shows that a slowdown has begun, albeit barely. According to that index, LA County prices rose 14.1% in November from a year earlier, compared with a 14.9% year-over-year increase in August.

For now, here’s a county breakdown of home prices and sales in November compared to a year earlier, as tracked by DQNews.

  • In Los Angeles County, the median sales price increased 12.6% to $788,000, and sales increased 7.7%.
  • In Orange County, the median sales price rose 14.9% to $919,000 and sales fell 3.5%.
  • In Riverside County, the median sales price increased 20.2% to $546,750, and sales increased 2.5%.
  • In San Bernardino County, the median sales price rose 18.8% to $475,000, and sales increased 5.6%.
  • In San Diego County, the median sales price rose 15.4% to $750,000, and sales fell 7%.
  • In Ventura County, the median sales price rose 14.6% to $755,000, and sales fell 0.6%.