California Housing Market: A Year in Transition

Sales Surge, Price Shifts, and the Road Ahead

California's housing market showed mixed signals in November, with the largest yearly increase in existing home sales since mid-2021. Year-to-date statewide home sales inched up by 3.1%, with November’s sales pace rising 1.1% from October and jumping a notable 19.5% compared to November 2023. While the market’s momentum is encouraging, it remains a work in progress, navigating the complexities of higher mortgage rates and shifting buyer behavior. The November median price declined 4% from October. Despite elevated mortgage rates creating hurdles for buyers, moderate home price growth and increasing housing supply offer a glimmer of hope for 2025.

“Mortgage rates continue to remain elevated, leading to challenges for many buyers. However, home prices are growing at a moderate pace and housing supply is increasing, indicating some hope that the market will continue to improve next year,” said 2025 C.A.R. President Heather Ozur

The price decline was largely due to changes in the mix of sales, with higher-priced homes pulling back more sharply than lower-priced segments. However, high-end home sales still played a role in lifting the statewide median price year-over-year. While price moderation is expected in the coming months, C.A.R.’s Chief Economist Jordan Levine predicts a rebound by the first quarter of 2025, driven by improved housing sentiment and potentially lower mortgage rates.

“Home prices are expected to moderate further in the next couple of months if they follow the seasonal trend, but should continue to grow in the first quarter of 2025 before the kick-off of the spring homebuying season…With mortgage rates expected to moderate in 2025, housing sentiment will continue to improve throughout the next 12 months, and more consumers will get off the sidelines as they acclimate further to the new market environment.” said C.A.R. Senior Vice President and Chief Economist Jordan Levine

Many potential buyers appear to be in a holding pattern, waiting for interest rates to stabilize or decrease. This cautious optimism mirrors trends observed in my own business, where buyers are adapting to the evolving market dynamics.

Inventory levels remain another critical factor shaping the market. While a balanced market typically requires four to six months of supply, California sits at just 3.5 months. This limited inventory keeps upward pressure on home prices, especially in high-demand areas like Los Angeles. As buyers and sellers navigate these challenges, the market continues to adjust, setting the stage for a potentially dynamic 2025.

California’s housing market shows resilience and growth potential despite current challenges, setting the stage for a promising 2025

And now for the latest data on Los Angeles County real estate trends:

Single family homes  |  Los Angeles County | November 2024

New Listings: 2,887 (Down 8.17% year over year)

Homes Sold: 2,657 (Up 12.63% year over year)

Median List Price: $963,000 (Up 3.77% year over year)

Median Sales Price: $970,000 (Up 3.19% year over year)

Median Days on Market:  20 (Up 25% year over year)

Average List Price: $1,471,670 (Up 7.59% year over year)

Average Sales Price: $1,450,773 (Up 6.6% year over year)

Average Days on Market: 35 (Up 16.67% year over year)

List/Sell Price Ratio: 100.3% (Down .6% year over year)

Condo homes  | Los Angeles County | November 2024

New Listings: 1,095 (Down 9.13% year over year)

Homes Sold: 905 (Up 1.57% year over year)

Median List Price: $689,999 (Down 2.13% year over year)

Median Sales Price: $690,000 (Down 3.5% year over year)

Median Days on Market: 28 (Up 47.37% year over year)

Average List Price:  $865,156 (Down 1.97% year over year)

Average Sales Price: $852,713 (Down 3% year over year)

Average Days on Market: 43 (Up 26.47% year over year)

List/Sell Price Ratio: 99.7% (Down .6% year over year)