During the pandemic, home sales boomed on a foundation of low-lying interest rates. Now real estate professionals are seeing the slowest market in 35 years.

With mortgage rates higher than 7 percent, Southern California home sales have fallen by almost half over the past two years, the Orange County Register reported.

Even with home prices inching back up as sales plummet because of the few number of homes for sale, real estate agents, home inspectors, escrow officers and mortgage brokers starve for business.

The average real estate agent earned 19 to 29 percent less business in the latest year measured, according to Real Data Strategies. At least 5,100 agents who made money in the prior year ended the most recent 12-month period without a single sale.

Helen Jeong, a Lake Elsinore agent with Keller Williams whose best year was in 2020 when five sales generated more money than she’d seen in 17 years in the industry, closed just three more sales over the next 2 ½ years.

“2020 was my best year,” Jeong told the Register between pep talks and training at the California Association of Realtors conference in Anaheim, where surviving the slowdown was a key theme. “After that, I’ve only had one closing per year, and that’s terrible.

“Buyers were all priced out.”

Realtors aren’t the only ones suffering. At the CAR conference’s booths for everything from home inspectors to home warranty providers, companies said their business is down 20 percent to 40 percent. Even providers of for-sale signs, lock-boxes and refrigerator magnets feel the pinch.

During the pandemic, home sales skyrocketed on mortgage rates averaging 3 percent for a 30-year, fixed-rate loan. A rise to 7 percent has all but killed the market.

Some 97,197 Southern California homes sold during the first seven months of this year, the lowest January-to-July total on record, CoreLogic figures show. This year’s sales were 41 percent lower than two years ago.

Gross revenue from sales fell by $114 billion in the 12 months ending in June in an area covered by the California Regional Multiple Listing Service, which includes most of Southern California. 

The “CLAW MLS,” which covers west Los Angeles and westside cities, had a $33 billion decrease, while a separate MLS system serving the Coachella Valley had a $5.2 billion revenue drop.

“All the ancillary services around real estate transactions are severely, severely impacted,” Pat Veling, president of Real Data Strategies in Laguna Beach, told the newspaper. “And that’s driving a really significant economic slowdown within the real estate and related channels.

“It’s bubbling under in the overall economy, and nobody’s really talking about it.”

— Dana Bartholomew

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