California Housing Market Breakdown

The California housing market in January 2025 showed a 6.2% year-over-year increase in median home prices, reaching $784,900. The number of homes sold rose slightly by 0.9%, while the inventory of homes for sale surged by 22.3%, indicating a growing supply. Homes spent a median of 53 days on the market, up by 8 days compared to the previous year.

Key Highlights:

• Supply: There were 83,712 homes for sale, a 22.3% increase year-over-year, with 29,596 newly listed homes (+21.2%).
• Demand: 33.3% of homes sold above list price, though this was a 2.7-point decline from the previous year. Homes with price drops increased to 20.7%.
• Competitiveness: The market remains competitive, with cities like Mountain View, Fremont, and Santa Clara being the most sought-after.
• Migration Trends: 27% of homebuyers nationwide searched to move to different metros. Sacramento, CA, was the top destination, while Los Angeles, CA, was the top origin for outbound moves.

Top Trends:

• Price Growth: Fastest-growing sales prices were in Laguna Niguel, CA (+41.1%) and San Luis Obispo, CA (+32.5%).
• Affordability: Rising prices and mortgage rates are making affordability a challenge, but increased inventory may offer more options for buyers.
• Market Predictions: Experts predict pent-up demand could lead to more sales, though some buyers may opt to rent due to high costs.

Overall, the California housing market is experiencing rising prices and inventory, with moderate competitiveness and significant migration trends. Buyers may find opportunities, but the window could close as market dynamics shift.