As of mid-2025, the housing market across Southern California is undergoing a clear transformation. Once defined by fierce competition and skyrocketing prices, the region is now shifting toward a more balanced, buyer-friendly environment. This trend is particularly evident in Ventura County, Los Angeles County, and the Inland Empire.
Recent market data shows that median home prices in Los Angeles County remain high, ranging from the upper $700,000s to around $820,000. In Orange County, prices approach the $1 million mark. However, the rapid pace of annual price growth seen in prior years has slowed. Inventory has improved, with regional supply increasing to approximately four months—up from three months a year ago—easing some pressure on buyers. Still, housing availability remains constrained in especially competitive areas like Los Angeles and Orange counties. Ventura County continues to reflect tight supply, maintaining its position among the priciest housing markets in the state.
The Inland Empire offers a more affordable alternative. With median home prices near $600,000 and year-over-year growth between 7 and 8 percent, it has become increasingly attractive to buyers seeking value outside of coastal urban centers. This affordability factor has also bolstered demand for rental housing throughout the region.
Statewide trends mirror these regional patterns. The California Association of Realtors reports that the supply of unsold homes has increased to four months as of early 2025, up from 2.9 months in the previous year. Median home prices across California have continued to climb modestly, reaching between $829,000 and $884,000 in recent months. While sales activity remains below peak levels, it has begun to rebound gradually as markets stabilize.
Across the country, the housing landscape is also showing signs of moderation. Inventory has grown for 19 consecutive months, with a notable 31.5 percent increase year-over-year in May. Nearly one in five home sellers is now reducing their asking prices. Homes are taking longer to sell—averaging 51 days on market compared to 45 days the previous year—giving buyers more time and leverage in negotiations.
Persistently high mortgage rates remain a headwind. Average 30-year fixed mortgage rates in California hover around 6.7 percent, limiting affordability and contributing to slower buyer activity. Many homeowners remain reluctant to sell, clinging to earlier ultra-low interest rates and further constraining housing supply.
The aftermath of the January 2025 wildfires, which destroyed over 18,000 structures in parts of Los Angeles County, continues to affect the market. The destruction pushed additional demand into already tight rental and resale markets. In the wake of the disaster, rental demand surged, and property investment grew. Firms like Essex Property Trust report high occupancy and rising rents due to the continued housing shortage.
Investor ownership in California real estate remains significant, with nearly one in five homes held by investors. These properties are concentrated in high-demand areas, where investor competition can further limit inventory for typical buyers. Critics argue this dynamic worsens affordability, particularly for first-time homebuyers.
Another factor influencing market activity is the reluctance of older homeowners to sell. Many baby boomers are holding onto their properties to avoid capital gains taxes, limiting turnover and reducing available inventory. Some in the industry believe that legislative changes to tax policy could encourage more movement among this demographic, opening up much-needed housing stock.
For buyers, the current environment offers more breathing room. Increased inventory and slower competition mean more choices and better negotiating opportunities, even as prices and interest rates remain challenging. For sellers, conditions are still generally favorable, though the days of multiple offers and bidding wars may be fading. Those who price their homes competitively are still finding buyers, but patience is becoming a more necessary virtue.
Overall, Southern California’s housing market appears to be entering a more balanced phase. While sellers retain some advantages, the playing field is leveling. As supply increases and price growth moderates, buyers are gaining ground in what has long been one of the nation’s most competitive real estate markets.
