Typical SoCal housing prices are down about 8% from their peak, but still up about 2% from last year.
The red hot housing market cooled down this year after mortgage interest rates for a 30-year fixed mortgage more than doubled over the last 12 months to about 7%.
"That definitely affected the housing market in terms of sales," said Oscar Wei, the deputy chief economist for the California Association of Realtors. "Also maybe actually slowing down price growth quite a bit."
CAR data shows the typical price for single family homes across Southern California is about $743,000. That's down about 8% from a peak in May, but still up about 2% from last year.
The most expensive county is Orange County, where the typical home cost $1.2 million as of October.
"If somebody actually put a 20% down payment and, one third of their income for housing costs, for Orange County for example, we're looking at a household income of roughly about $278,000," Wei said.
An analysis by real estate company Redfin found the annual salary needed to afford a typical mortgage in Anaheim, for example, would be more than $254,000.
The typical annual household income is in Anaheim is about $77,000, according to Census data.
"Even within Southern California there are areas that are more affordable than others like Riverside, San Bernardino; they're probably a little bit more affordable compared to L.A., Orange County and San Diego," Wei said.
California Association of Realtors data shows just 13% of those living in Orange and L.A. Counties can afford a typically-priced home.
Wei said first time homebuyers may have a harder time affording a home because existing homeowners can use their equity to buy.
"Many of them can actually use their equity that they gained over the last two years so they sell their property and use their equity and actually use it for their next home," he said.
He said potential homebuyers have to also take into account property taxes and home insurance when buying a home.
Wei said people should not expect a significant drop in mortgage rates until late 2023 or early 2024.