Southern California, July 31, 2025 – As the region transitions from summer toward fall, the Southern California housing market is revealing a complex and somewhat contradictory outlook. Some indicators suggest a softening in prices, while others point to continued strength—highlighting a market in flux.
In May 2025, average home prices across Southern California’s six-county region fell slightly—about 0.2 percent compared to May 2024—placing the average at roughly $876,000, marking the first year-over-year decline since mid‑2023. Yet as of mid-2025, prices remained elevated at close to $866,400, indicating a 4.8 percent increase from mid‑2024 levels, driven by persistent demand and chronically low housing supply.
This apparent contradiction underscores the significance of timing and geographic segmentation. For example, annual sales volume fell 7.6 percent in May, weighed down by high mortgage rates and economic uncertainty—but home prices held firm or rose in key submarkets. County-level differences are equally critical: Los Angeles County median prices hover near $1.2 million, while Riverside County remains comparatively affordable, at about $628,000.
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Experts say this split reflects both seasonal patterns and local variability. On the one hand, summer tends to bring a modest cooling, particularly after major events such as the January wildfires, which devastated over 18,000 homes across Los Angeles‑area counties and exacerbated already severe housing shortages. On the other hand, strong migration into inland markets like the Inland Empire, alongside low levels of resale inventory, continue to support price gains overall.
Affordability remains a central concern. A recent study found that in regions such as the Inland Empire and coastal metros like Los Angeles, mortgage payments can exceed 66 percent of per capita income—far above the national average of around 36 percent. Many prospective buyers are turning instead to new construction, where median prices in California—with incentives from developers—can be nearly $200,000 lower than resale homes, averaging $591,000 versus $785,000. Nonetheless, restrictive zoning and land scarcity in coastal areas continue to hinder affordability improvements.
Looking ahead, statewide projections from the California Association of Realtors foresee existing home sales rising by around 10.5 percent in 2025, with prices climbing 4.6 percent to a median of $909,400 by year-end. Analysts remain cautious, warning that if mortgage rates remain elevated—typically in the high-6 to low-7 percent range—affordability could further deteriorate and eventually weigh on prices.
On July 31, 2025, real estate professionals convened in the Dallas–Fort Worth metro region for the annual Tarrant County State of the Market conference, hosted by BISNOW. The day-long event offered insights into regional trends affecting residential, commercial, and mixed-use development—highlighting how the fast-growing area is responding to shifting market dynamics.
Attendees addressed growth drivers in Fort Worth—such as population inflows, large-scale infrastructure investments, and demand for multifamily and mixed-use properties—in a market increasingly distinct from Dallas. Notably, Fort Worth is shedding its “quiet counterpart” reputation and emerging as its own commercial and lifestyle hub.
Speakers discussed the evolving landscape in sectors like hospitality, healthcare, data centers, and industrial real estate, and debated investment strategies across capital markets—including affordable housing and workforce residential options. This regional snapshot serves as a useful counterpoint to Southern California—demonstrating how different U.S. metros navigate economic pressures, demand trends, and development constraints.
While Southern California grapples with high prices, fire-driven housing losses, and strained affordability, its market remains resilient thanks to limited supply and steady buyer demand—particularly in inland counties. Emerging trends include increased interest in newly built homes priced well below existing inventory, though coastal markets remain largely inaccessible for many buyers.
Meanwhile, Tarrant County and the broader DFW region offer a contrasting environment: rapid job-driven population growth, substantial new development opportunities, and more favorable pricing. The BISNOW conference on July 31 underscored the importance of understanding how local conditions shape real estate cycles differently across the U.S.
As summer closes, both markets illustrate that regional diversity is key to understanding real estate conditions: while price signals may conflict at the macro level, a hyper-local lens reveals distinct trends driven by geography, policy, and consumer behavior.
