California
Housing Market
The landscape of California’s housing market is on the cusp of a major shift. The market evolves with shifting home prices, demand, and migration. Houzeo’s housing market report tracks these changes across the state. Our report offers real-time insights to help you make informed decisions.
Overview
Supply
Demand
Buy or Sell
Market Insights
MigrationCalifornia Housing Market Overview
California home prices show a growth of 6.3% YoY as of January 2025. The steady increase in home prices indicates the strength of the housing market. The median home price in California is currently $786,400, and, based on trends from the last 3 years, it’s expected to go beyond $815K in the summer. California house prices remain almost double the national average, which sits at $417,968. Moreover, the number of homes sold has increased only by 1% YoY.
You can also check the competitiveness through median days on the market. Homes in California now spend 53 days on the market before going under contract. This number may drop to as low as 25 days in summer. These metrics collectively indicate changes in the California real estate market’s pace and affordability.
What Does It Mean for Home Buyers and Sellers?
You can also check the competitiveness through median days on the market. Homes in California now spend 53 days on the market before going under contract. This number may drop to as low as 25 days in summer. These metrics collectively indicate changes in the California real estate market’s pace and affordability.
What Does It Mean for Home Buyers and Sellers?
- If You're a Buyer: Home affordability remains a challenge in California. High median home prices, coupled with high interest rates, can strain your budget. However, you get some negotiation power with the median days on market, which has increased by 8 days YoY. You can plan to buy a house when the competition is low and inventory increases in the months to come.
- If You're a Seller: Though home sales are in a slump, you have certain metrics in your favor. You can profit from the growing home prices only if the market has high demand. The 6.3% hike in housing prices and an anticipated decrease in the number of days on the market in the summer signal opportunities to earn profits. The wildfires in Los Angeles have caused property values to dip, but the impact seems localized to that area and is expected to fade quickly.
California Housing Supply
Currently, California is witnessing a crisis with homeowners insurance due to the prevalent risk of wildfires and heavy winds. The high mortgage rates may also shrink buying power. However, the available homes for sale inventory grew by 22.8% in January 2025. It’s a trend that typically continues to rise post February and March. This year, the inventory is projected to go beyond 100K. Currently, there are 83,668 California homes available for sale with an average supply of 4 months. New construction will also add to the housing inventory.
What Does It Mean for Home Buyers and Sellers?
What Does It Mean for Home Buyers and Sellers?
- If You're a Buyer: With a 22.8% increase in housing inventory and a 4-month supply period, you have more inventory options. The number of newly listed homes also grew by 21.4%. But due to high prices and economic depression, sales are slow. You may have to wait a little till home prices become stable. If you see more growth in the inventory level and a dip in the median sale price, you can buy your dream home.
- If You're a Seller:With 4 months of supply and climbing home prices, you’re in luck. Act fast and sell your home before more supply hits the California real estate market. Rising inventory could lower demand and lead to fewer offers for you. Moreover, despite the high competition in cities like San Diego and Los Angeles, you should still make your home appealing to buyers. Focus on staging and marketing your home effectively.
California Housing Demand
A dense population and high inbound migration trend in California drive the demand for properties up. The percentage of homes selling above the list price is a key indicator of housing demand. When more homes sell above the list price, it shows strong buyer competition and high demand. A decline suggests more supply. Tracking this trend helps you gauge market competitiveness.
In January 2025, 33.3% of California homes sold above the list price, while 20.4% of homes sold below the list price. The number of homes selling above the list price tends to increase in spring and summer. This means that buyer competition will surge, and hot homes will sell within 15-20 days. The current 99.2% sale-to-list price ratio suggests very few negotiation opportunities.
What Does It Mean for Home Buyers and Sellers?
In January 2025, 33.3% of California homes sold above the list price, while 20.4% of homes sold below the list price. The number of homes selling above the list price tends to increase in spring and summer. This means that buyer competition will surge, and hot homes will sell within 15-20 days. The current 99.2% sale-to-list price ratio suggests very few negotiation opportunities.
What Does It Mean for Home Buyers and Sellers?
- If You're a Buyer: The current California housing market has a few metrics that lean in your favor — such as the 20.4% of homes with price drops and increasing inventory. However, expensive properties and high mortgage rates (nearly 7%) could make things tough for you. Go light on negotiations, and don’t expect many seller concessions. You may also have to make any home repairs yourself after closing.
- If You're a Seller:You'll make a good profit if the market has good demand. With an increase in home prices, limited supply, and a 99.2% sale-to-list price ratio, the negotiation power lies in your hands. However, due to the stagnant market, you will have to wait till summer, when you’ll experience even higher demand and more bidding wars for your home. You can price your home on the higher end, but first, check the pricing of comparable properties in your neighborhood. If mortgage rates continue to increase, it will make high-priced homes less affordable. So, you may have to reduce your price to close the deal faster.
Is It a Buyer's or Seller's Market in California?
Strong
Buyer
Buyer
Balanced
Seller
Strong
Seller
Buyer’s Market
Seller’s Market
Balanced: Neither buyers nor sellers dominate the market. Supply meets demand, prices stay stable, and both parties negotiate on an equal footing.
Is It a Buyer's or Seller's Market in California?
As of January 2025, it’s a slow and balanced market due to the recent shocks. Home sellers in California may get an advantage with increased prices and a limited supply of homes, but only if the market is active. For buyers, homes are relatively expensive, and competition is high amid growing mortgage rates. The current mortgage rate is close to hitting 7%, which may reduce buying power in the state-wide real estate market. However, a 22.8% growth in housing inventory does provide many options to California home buyers.
These trends vary significantly across the California real estate market. You must check the current growth rate of home prices in your city or locality. Property appreciation in Sacramento is not promising, and it’s been declining for the last 4 months. The average home price in San Jose grew by 11% in January 2025, with a sale-to-list price ratio of 103%. The market in Santa Clara is highly competitive, where hot homes can sell for 16% more than the list price and go pending in just 8 days. So, check local trends in your neighborhood through Houzeo’s housing market chart before you decide to invest.
California Housing Market Insights
The California real estate market is somewhat competitive and currently favors sellers. House prices in California rose at a rapid rate in 2023-24. The average home price in California ($786,400) is way higher than the national median of $417,968. Inventory trends indicate a growing availability of houses in California. Currently, there are 83,668 homes available in the Golden State. Carefully consider the local housing trends before you make a transaction. If you notice an appreciation in prices in recent months, it could be a sign of a seller’s market. On the other hand, buyers will have the upper hand if prices go down or supply increases.
Southern California housing markets like Orange County show high competition; the average home goes under contract in 35 days and gets multiple offers. 34% of homes sold above the list price, and the sale-to-list price ratio of 99.5% also favors sellers. Overall, CA’s housing market shows a constant appreciation in prices. If you want to buy homes in California, you can wait for the prices to drop. If you plan to buy a single-family home, you may have to settle for a condo or a townhouse for affordable prices.
Southern California housing markets like Orange County show high competition; the average home goes under contract in 35 days and gets multiple offers. 34% of homes sold above the list price, and the sale-to-list price ratio of 99.5% also favors sellers. Overall, CA’s housing market shows a constant appreciation in prices. If you want to buy homes in California, you can wait for the prices to drop. If you plan to buy a single-family home, you may have to settle for a condo or a townhouse for affordable prices.
Nationwide Migration Trends
Last year, California residents moved out of the state to relocate to Florida, Georgia, and Idaho. Nearly 700,000 people relocated from the state over the last year due to the high cost of living and housing expenses. The cost of living in California is 38% higher, and housing costs are 97% higher than the national average.
There is also a conspicuous inbound trend, with CA gaining about 420,000 new residents in 2023-24. The new residents primarily came from Arizona, Colorado, and DC. Despite the extremely high housing costs, people are attracted to California’s excellent economy and healthcare.
There is also a conspicuous inbound trend, with CA gaining about 420,000 new residents in 2023-24. The new residents primarily came from Arizona, Colorado, and DC. Despite the extremely high housing costs, people are attracted to California’s excellent economy and healthcare.
Frequently Asked Questions
Are home prices going down in California?
The average home price in California has continued to rise over the past years, driven by high demand. Prices have increased at an annual growth rate of 6.3%, with multiple regions seeing double-digit percentage growth. You can check your home’s fair market value with a free home value estimatorfree home value estimator to know where you stand.
Is it a buyer's or seller's market now in California?
It’s a balanced and slow market now. Recent wildfires have challenged California's housing market. But now, it’s back on a path to stability. With the current high housing prices, buyers will have to wait on the sidelines for lower mortgage rates. Despite the state’s high cost of living, a large population of high-income buyers flock here for an improved quality of life and job opportunities. You can learn more about the market from the housing market chart before you decide to invest.
What is the average house price in California?
The average house cost in California depends on the property type, size, and local market conditions. It typically ranges from $606K for condos to $815K for single-family homes. You should also check the price appreciation in your neighborhood. The average property appreciation rate in Los Angeles per year is 13%, and in Sacramento, it’s -66%. If you plan to buy, you can find cheap homes in California within your budget.
Will the housing market in California crash?
California housing market predictions for 2025 show that the market is very unlikely to thaw. In fact, it’s expected to yield high profits for home sellers. Rising home prices and mortgage rates may make it hard for buyers to find houses in California. Nevertheless, demand and supply for homes will continue to flourish due to a robust economy and population growth in the state.
Is it a good time to buy a house in California?
Presently, housing inventory is tight, and home prices are on the rise. Check real estate trends for prices and inventory in your area before you make a decision. Sellers can benefit from the high demand and rising prices. However, when mortgage rates are stable and there is plenty of housing inventory, it would be the best time to buy a house in California.
Which is the cheapest place to buy a house in California?
Though property prices are rising, the average home value in the top 10 cheapest cities is around $500K to $600K. Fresno and Bakersfield’s cost of living is nearly 20% lower than the national average. You can compare costs of living, housing costs, and median home prices to narrow down the cheapest places to live in California.
What is the best place to buy a house in California?
Orange, Roseville, and San Jose are among the best places to live in California. These cities top the list based on factors like community well-being score, median household income, and safety index. Make sure you research the best places to live in California before you buy a home.
How can I list my home for sale in California?
You can list your home for sale with a Flat Fee MLS California listing service. High-tech MLS listing sites like Houzeo automatically assign the right MLS paperwork based on your location. 🚀
What is the average mortgage rate for buyers in California?
The average mortgage rate for buyers in the CA housing market fluctuates between 6.75% and 7.25%. It depends on the market and your credit score. Always check current rates with lenders before you apply for a mortgage.
How much does it cost to live in California?
The cost of living in California is 38% higher than the national average. However, it depends on your city. Sunnyvale is California’s most expensive city, where cost of living is 62% higher than the state average and 125% higher than the national average. On the other hand, Fresno’s cost of living is 21% less than the US average. You can use our California cost of living calculator to know more.
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