The California housing market is poised for an eventful year in 2025. According to the California Association of Realtors (C.A.R.), home prices are expected to rise as more buyers and sellers re-enter the market, encouraged by lower interest rates and improved housing inventory.
2025 Housing Market Projections:
- Increased Home Sales: Existing single-family home sales are forecast to reach 304,400 units, a 5% increase from 2024’s estimated 275,400 units.
- Higher Home Prices: The median home price in California is projected to climb 6% to $909,400 in 2025, following a 6.8% increase in 2024.
- Stable Housing Affordability: Housing affordability is expected to hold steady at 16% in 2025 after declining slightly in previous years.
What This Means for Buyers, Sellers, and Investors
While inventory levels are expected to improve, the increase in active listings will likely be modest. Homeowners and investors who delayed selling are expected to list their properties as interest rates drop and prices rise. However, growing demand will continue to create competition, pushing prices higher despite a more favorable housing supply.
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