Record-breaking home prices in SoCal making it difficult for buyers and sellers

RANCHO CUCAMONGA, Calif. (KABC) -- Sky-high prices in the Southern California housing market are making it difficult for both buyers and sellers alike.

And those record-high prices might have many people wondering whether the market is overpriced right now.

"I think so," said Dan Griffith, with Realty Word All Stars. "But the market is saying no."

Griffith said that while high prices often indicate a "seller's market," that's currently not the case. High interest rates are discouraging many sellers from selling their property.

"Sellers want to sell, but they're reticent to when they (currently) have a 3% interest rate," he said. "And to buy, it would be more expensive and at a higher rate, so it knocks out that equity gain they have.

"So we've had clients last couple of years that they sell here, but they buy in Tennessee and Nevada and Arizona, and their money goes a lot farther."

If there is good news for buyers, realtors say that with prices so high prospective buyers might not need to be as worried about getting into a bidding war as they might have in the past.

"A few years ago, we would have 25, 30, or even 35 offers (on a listing), and they weren't able to compete," said realtor Colt Rhodes. "Now they're able to compete. Now listings are getting two, three, four, five offers.

"And instead of (offers) being $50,000 or $60,000 over asking price, they're $5,000, $10,000 or $15,000 over asking price."

Many buyers are probably wondering whether they should wait for prices - and interest rates - to drop. Griffith said there's no easy answer.

"If interest rates do come down, and we know they will, prices might go up accordingly to reflect that. So if you're waiting for prices to come down, it's probably not a good idea, because you'll pay more down the road."