Why did Southern California homeowners rush to sell in October?

The “Looking Glass” ponders economic and real estate trends through two distinct lenses: the optimist’s “glass half-full” and the pessimist’s “glass half-empty.”

Buzz: Southern California house hunters can pick from the biggest selection of homes for sale in 10 months after a flurry of homes hit the market in October.

Source: My trusty spreadsheet looked at Realtor.com listings data compiled by the St. Louis Fed for the six-county region.

Debate: Did something scare Southern California homeowners, making them rush to list their homes for sale?

Glass half-full

October had 23,228 residences for sale after a surprising late-year jump of 1,456 listings of existing homes from the previous month.

Local house hunting has struggled with low affordability due to lofty mortgage rates, stubbornly high prices and limited options. That’s why Southern California is on pace for its lowest number of completed sales for a year in CoreLogic data that dates to 1988.

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But October is typically part of the post-summer cooling in home sales. Since 2016, local inventory has dropped by 406 homes on average in the month.

Instead, local house hunters enjoyed the largest October inventory gain found in Realtor.com’s eight years of listing history.

October also marked the biggest leap in supply for any month since July 2022 – 15 months ago. That boost provided Southern California house hunters with 2023’s largest inventory and the most choices since December.

Glass half-full

Southern California, like much of the nation, has seen fewer owners put their homes on the market in the pandemic era’s often unnerving economy.

So why October’s listing rush – the seventh-biggest increase of any month since February 2020, when coronavirus upended the economy?

Still, even with October’s bump, house hunters get to choose from a supply that’s 65% of the month’s 35,782 average inventory the previous seven years.

Bottom Line

Is October the supply break the market seems to need? Could more housing options weaken prices and help affordability? Just 15% of Californians can afford to buy, by one count.

Or maybe this selling rush is simply a return to somewhat normal. Consider 2018, when rates were also on the upswing. Supply peaked that year in November.

Of course, it’s different this time.

Mortgages five years ago were jumping all the way to … just under 5% vs. nearly 8% this year! And local inventory’s 2018 top was 49,124 homes – more than double October 2023.

Location. Location. Location.

Here are the ups and downs of homes on the market among Southern California’s counties for October …

Los Angeles: 8,862 listings – up 578 in a month. That’s the No. 1 October gain over 8 years. Compare it to the month’s average gain of 3 since 2016. Supply is 73% of the 12,103 October norm.

Orange: 2,353 listings – up 25 in a month (No. 2 October gain) – vs. an average dip of 235 since 2016. Supply is 47% of the 5,023 October norm.

Riverside: 4,502 listings – up 470 in a month (No. 2 October gain) – vs. an average gain of 154 since 2016. Supply is 66% of the 6,819 October norm.

• TRACK HOME INVENTORY: Get free SoCal supply data via St. Louis Fed. BOOMARK THIS LINK!

San Bernardino: 3,928 listings – up 110 in a month (No. 1 October gain) – vs. an average dip of 119 since 2016. Supply is 74% of the 5,300 October norm.

San Diego: 2,848 listings – up 226 in a month (No. 1 October gain) – vs. an average dip of 153 since 2016. Supply is 55% of the 5,206 October norm.

Ventura: 735 listings – up 47 in a month (No. 1 October gain) – vs. an average dip of 56 since 2016. Supply is 55% of the 1,331 October norm.