There Is A Shift Happening In Southern California Real Estate Now

The Southern California real estate market in 2025 is experiencing a shift: sales have slowed, inventory is rising, and a more balanced market is giving both buyers and sellers new opportunities. 📈🏡

🏠 Current Market Snapshot

• Home Sales: Sales of single-family homes are down compared to last year, with Los Angeles nearly flat and declines in Orange, Riverside, and San Diego counties (some as high as 16%).

• Inventory: Active listings are up 37.7% year-over-year. The unsold inventory index reached 3.8 months in July 2025, higher than the previous year.

• Prices: The median price for homes is holding firm, with slight dips in some areas but no crash. County medians in Southern California range around $900,000.

• Market Pace: Expected market time is approximately 110 days, reflecting slower buyer activity, typical for autumn but also influenced by higher rates.

🔮 Market Projections: What’s Next?

• Growth Forecast: The California Association of Realtors projects a 4.6% increase in the statewide median home price, reaching $909,400 in 2025.

• Sales Rebound: Home sales volume is forecast to jump by 10.5%, as more favorable interest rates and higher inventory draw buyers back.

• Interest Rates: Recent declines in rates (down to 6.29%) could spur activity, potentially heating up the market if they move into the 5s.

• Affordability and Supply: Housing affordability is expected to stabilize at 16%, and ongoing outmigration has not solved the region’s housing shortage.

🏘️ Regional Highlights

• Los Angeles & Ventura: Sales are stable or slightly up; market remains competitive but less frenzied than in past years.

• Orange County: Inventory build-up is applying downward pressure on prices, signaling potential for buyers seeking deals.

• Riverside & San Diego: Larger drops in sales but active new inventory offers opportunities for negotiation.

💡 What This Means for Buyers & Sellers

• Balanced Market: Buyers have more negotiating power and options, but sellers can still expect strong values in desirable areas.

• Timing: With rates dropping, now may be an ideal window for buyers to enter before competition intensifies.

• Investment Potential: Southern California remains a prime region for long-term real estate investment due to ongoing demand and its resilient economy.

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