What To Expect For The 2025 California Real Estate

By Kandie Frederick

Growing up on the central coast, Kandie is a third generation family in the North County and a second generation family in real estate. Joining Country Real Estate in 2000, and graduating from Cal Poly in San Luis Obispo, she brings a background of Agricultural Business to combine with her knowledge of the local real estate market. Working with her family and their decades of local real estate development, she is deeply connected to the roots of our community and its growth.
“This area continues to grow as people discover what a great travel destination it is, and what a great wine region it has become. Eventually, they realize what a great place it is to live and work as well. Adapting to the needs of our clients in a changing environment is always a priority. We remain the longest standing brokerage in a community we are deeply invested in. Our longevity is attributed to our innate ability to understand the North County: its people, its properties, and its culture.” -Kandie

Wondering what the future holds for California’s real estate market? Let’s explore the 2025 housing forecast and what it means for you.

With the recent release of the California Association of REALTORS®’ 2025 housing market forecast, there’s exciting news for both buyers and sellers. Home sales and prices are projected to increase slightly as Interest rates decline and more inventory becomes available. This month, we’ll discuss the key trends and factors driving this optimistic outlook. By the end of this video, you’ll clearly understand what to expect in the California real estate market in 2025 and how to prepare for it. Key takeaway: Don’t wait. Here is what to expect:

#1: Increased Number of Home Sales in 2025

California’s existing single-family home sales are forecast to rise by 10.5% in 2025, reaching 304,400 units, which is up from the 275,400 units that were projected in 2024. This increase suggests a more active market with more opportunities for buyers and sellers.

#2: Rising Home Prices

The Median home price in California is expected to climb 4.6% to $909,400 in 2025, following a projected 6.8% increase to $869,500 in 2024. Persistent housing shortages and a competitive market will continue to put upward pressure on prices. Keep in mind that these are statewide numbers, but our region will likely follow a similar pattern.

#3: Favorable Interest Rates

Interest rates are expected to decline, with the average 30-year fixed mortgage rate falling from 6.6% in 2024 to 5.9% in 2025. Lower borrowing costs will encourage more buyers and sellers to enter the market. Again, these are averages, so we will see varying numbers throughout the year. Be sure your loan prequalification is up to date with your lender now for a competitive edge.

#4: Improved Housing Inventory

Right now, sellers are reluctant to let go of their 2-3% interest rates even if they need a larger or smaller home. They feel locked in to what they have. The improving interest rates are already loosening up the “lock-in” effect, and this will lead to a moderate increase in housing inventory. More homeowners are expected to sell, providing more options for buyers. Again, my tip is: don’t wait. Don’t wait to compete with those buyers. Buy it now with less competition against other buyers, and refinance later.

So, are you planning to buy or sell a home soon? Now is the time to start preparing. Visit our website ** ** to explore listings, or contact me for personalized guidance. Don’t forget to like this video, follow us on social media for more real estate insights, and reach out anytime with your questions.

Let’s conquer the 2025 market together!