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Southern California Real Estate Market Update:
Positive Momentum Heading into 2025
The final weeks of 2024 brought encouraging news for the economy and housing market, setting an optimistic tone for the new year. New home sales continued to climb, small business optimism hit its highest level since 2018, and mortgage rates started to ease from recent highs. While California faced challenges early in the year—particularly due to devastating wildfires—recovery is underway, and we expect the housing market to gain momentum as we approach the spring homebuying season.
New Home Sales Continue Upward Trend
December marked the second consecutive month of rising new home sales, with a 3.6% month-over-month increase following a strong November. Sales reached a seasonally adjusted annual rate of 698,000, up 6.7% from December 2023. Regionally, the Northeast and West saw double-digit monthly gains, while the Midwest and South experienced slight declines. Inventory levels tightened for the second straight month, dropping to 8.5 months of supply. However, the number of new for-sale homes remained elevated, rising 1.2% from November and 10% year-over-year. Moving forward, new home sales may face headwinds due to persistently high mortgage rates and increasing supply in the existing home market.
Labor Market Remains Stable into 2025
The job market showed resilience at the start of the year, with weekly jobless claims rising slightly to 223,000—an increase of 6,000 from the previous week. External factors like the California wildfires and winter storms across the country likely contributed to the uptick. Despite the modest increase, the labor market remains on solid footing. However, while layoffs remain low, job openings may be tightening as businesses remain cautious amid ongoing economic uncertainties. Continuing unemployment claims rose to 1.899 million—the highest level since late 2021—suggesting that some job seekers are taking longer to find employment.
Single-Family Rent Growth Slows to 14-Year Low
Nationwide, single-family rental price growth slowed to just 1.5% year-over-year in November, the lowest rate in over 14 years. Detached rentals saw a 1% annual increase, while attached properties rose 1.7%. High-priced rentals experienced slightly stronger growth (+2%), while lower-priced units declined by 2.8% year-over-year. Among major metro areas, Detroit (+6.1%), Washington D.C. (+5.5%), and Honolulu (+4.3%) led in rent growth, while San Diego (-0.3%) recorded an annual price decline. Given the continued strength of the job market and steady rental demand, rent growth could begin to rebound in 2025.
Single-Family Construction Gains Momentum
Residential construction activity surged in December, driven largely by a rebound in the hurricane-affected South. Total housing starts jumped 15.8% from the previous month but remained 4.4% below year-ago levels. Multifamily starts saw the biggest spike, rising 61.5% month-over-month, though they were still down 8.4% year-over-year. Meanwhile, single-family starts continued to improve, marking their second consecutive monthly increase and growing in all regions except the South. Overall, single-family housing starts in 2024 increased 6.5% from the previous year. Permits also rose, but much of the gain came from hurricane-recovery areas in the South. While construction activity showed strength, builders may face headwinds in the coming months due to elevated interest rates and potential shifts in demand.
Looking Ahead
With mortgage rates easing and the spring homebuying season approaching, demand in the California housing market is expected to strengthen in the coming months. However, factors such as inflation, insurance challenges, and policy shifts under the new administration could shape market conditions in 2025. Keeping a close eye on interest rates, inventory levels, and economic indicators will be key for both buyers and sellers navigating the market in the year ahead.
If you have questions about what these trends mean for your real estate goals or are considering making a move in 2025, let’s connect. I’m here to help you make informed decisions in this dynamic market.
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Looking To Move Out Of State?
Save Thousands for Dollars With Our
Relocation Program
As a top agent with the #1 brokerage in North America, I have relationships with some of the top agents all over the country. I have recently helped some clients move to Tennessee, Arizona, Nevada, Montana, Texas, Florida, and other states with the help of my KW Relocation network of local experts to help them find their next dream home. My network of agents saved them thousands of dollars and reduced the time and hassle of finding a new home in another state.
If you or someone you know is looking to relocate to a new city or state, contact me to tap into the power of my network of experienced agents throughout North America.
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Looking To Sell A Property That Needs Some Work?
Save The Time & Hassle With Our Listing Concierge!
Does your property need some TLC or would having some improvements help you fetch top dollar? With our new listing concierge service we will coordinate getting your home all fixed up and ready to sell. We will manage the entire process of getting your home ready and all decked out with the latest trends, designs and materials. Our contractors are all licensed, bonded, and insured and do excellent work. Best of all, there is no money due up front. This saves you the time and expense of interviewing contractors, managing the work, and all the headache that goes along with fixing up a property. This enables our clients to position their property as "move in ready" to capture maximum buyer interest.
When we renovate homes, our clients receive on average a 150% return on investment!
We have negotiated great terms with our contractors and they don't get paid until the work is done and the home is sold.
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3603 E Hungerford Ave.
Long Beach, CA 90805
2 Bed + Bonus Room | 1 Bath | 1064 SF | $830,000
Charming 2-Bedroom + Bonus Room Home in a Quiet Long Beach Neighborhood. This beautifully updated home features fresh exterior paint, a new roof, and central AC. The light-filled living room boasts wood floors, recessed lighting, and an inviting atmosphere, while the updated kitchen includes granite counters, stainless steel appliances, and modern cabinetry. A spacious bonus room with a stone fireplace offers versatility as a family room or 3rd bedroom. The expansive backyard with a patio is perfect for entertaining or adding an ADU, and the long driveway with a finished 1-car garage provides plenty of parking. Located near Lakewood Mall and local amenities, this home is a must-see!
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3817 W Compton Ave.
Orange, CA 92868
4 Bed | 2 Bath | 1316 SF | $979,900
Beautiful Single-Story Pool Home with Modern Upgrades in Orange, CA! Discover this stunning 4-bedroom, 2-bathroom home situated on a spacious 7,598 sq. ft. lot in a fantastic Orange neighborhood. This thoughtfully updated home offers everything you need for comfortable living and entertaining. Located in a friendly neighborhood, this home offers unbeatable access to major freeways (I-5 and 22), top destinations like UCI Medical Center, Angels Stadium, Disneyland, Old Towne Orange, The Outlets at Orange, Chapman University, Honda Center, and GardenWalk. This is the perfect opportunity to live in a vibrant area while enjoying a tranquil and well-appointed home.
OPEN HOUSES
Saturday (2/1) & Sunday (2/2)
1:00 - 4:00pm
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700 E Ocean Blvd #1706
Long Beach 90802
2 Bed | 2 Bath | 1080 SF | $850,000 **Just Reduced**
Experience luxury coastal living with breathtaking ocean views from every room in this beautifully remodeled high-rise condo at the iconic International Tower. This light-filled unit features an open floor plan, updated kitchen with sleek cabinets, marble countertops, and stainless steel appliances, and a spacious primary suite with a luxurious soaking tub. Enjoy panoramic vistas from the large wrap-around balcony, plus access to top-notch amenities, including a pool, fitness center, and 24-hour security, all just steps from the beach and vibrant local dining.
Eligible for a $20,000 down payment grant from City National Bank!
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223 Elm Ave.
Long Beach 90802
2 Bed | 3 Bath | 1570 SF | $810,000
Enjoy modern luxury living in this stunning 2019-built townhome at The Huxton in the East Village Arts District. This inviting home features an open-concept layout perfect for entertaining, with high ceilings, large windows, recessed lighting, and beautiful flooring throughout. The gourmet kitchen boasts quartz countertops, soft close cabinets, and upscale appliances by Bertazzoni and Bosch. Upstairs, two primary suites offer walk-in closets and luxurious bathrooms. Enjoy city views from the spacious rooftop deck – ideal for relaxing or BBQs. Eco-friendly features include owner-owned solar panels and a garage pre-planned for EV charging. Located in a secure, gated complex, you’ll be steps from the waterfront, dining, cafes, and nightlife. VA Approved.
Eligible for a $50,000 down payment grant from City National Bank!
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225 W 6th St #515
Long Beach 90802
1 Bed | 1 Bath | 547 SF | $334,999 **Just Reduced**
Top-floor end unit condo in the heart of Long Beach, offering privacy and city views. This nicely updated home features an open living area with a private balcony, a stylish kitchen with butcher block countertops, and a bright bedroom with two mirrored closets. Located near top attractions like the Long Beach Convention Center and Shoreline Village, with easy access to dining, shopping, and transportation.
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4859 Autry Ave.
Long Beach 90808
3 Bed | 2 Bath | 1594 SF | $999,000
Charming 3-Bedroom, 2-Bath Lakewood Village Home on a Picturesque Tree-Lined Street! This beautifully maintained home blends classic appeal with modern upgrades. Step into a bright living and dining area with refinished original hardwood floors and a bay window. The spacious kitchen boasts ample storage, a custom breakfast bar, and opens to a formal dining and family room. The primary suite offers a peaceful retreat with an updated bathroom. Additional highlights include central heat and AC, dual-pane windows, bamboo flooring, and a detached 2-car garage. Conveniently located near parks, shopping, and dining, this home provides a comfortable and connected lifestyle.
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488 E Ocean Blvd #P9
Long Beach 90802
1 Bed + Bonus Room | 1.5 Bath | 1447 SF | $792,500
Experience Luxury Living with Breathtaking Panoramic Views in this Rare Two-Story Penthouse! AMAZING VIEWS!! Discover unparalleled luxury in this stunning 18th & 19th-floor penthouse in the prestigious Aqua high-rise building in downtown Long Beach.
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706 E Bixby Rd
Long Beach 90807
3 Bed | 2 Bath | 1417 SF | $1,080,000
Welcome to this beautiful California Heights home, featuring over $250,000 in recent updates that blend modern luxury with timeless charm. The spacious living room invites you in with an abundance of natural light, gleaming oak wood floors, a cozy fireplace, and elegant recessed lighting. The newly updated custom kitchen is a chef’s dream, boasting top-of-the-line Café and Miele appliances. Great open floor plan with formal dining room that opens to the living room and kitchen. Both bathrooms have been beautifully remodeled with quartz countertops, custom white oak vanities, stylish tile work, modern lighting, and the primary bath features a luxurious soaking tub for ultimate relaxation. Located just 1-2 blocks from award-winning Blue-Ribbon schools (Longfellow Elementary & Hughes Middle School), and within walking distance to the vibrant shopping, restaurants, and cafes in Bixby Knolls.
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3503 Marber Ave.
Long Beach 90808
3 Bed | 2 Bath | 1553 SF | $1,120,000
Impeccable South of Conant Home on a Beautiful Tree-Lined Street! This charming 3-bedroom, 2-bath home in a highly sought-after neighborhood exudes curb appeal with designer touches throughout.
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2101 E 2nd St #205
Long Beach 90803
2 Bed | 2 Bath | 1064 SF | $679,900
Enjoy the ocean breeze in this beautiful condo located just 2 blocks to the beach and across from Bixby Park. Walking distance to the beach, Retro Row, Broadway Ave, dog park, Farmer’s Market, and all the great local restaurants, cafes, and nightlife.
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6815 E Monlaco Rd
Long Beach 90815
3 Bed | 2 Bath | 1254 SF | $995,000
Welcome Home to Modern Elegance in the Heart of the Plaza Area, Long Beach! Nestled in the highly sought-after Plaza neighborhood, this newly updated 3-bedroom, 2-bathroom residence invites you to experience the perfect blend of contemporary comfort and classic charm. Step inside to discover a thoughtfully designed living space that seamlessly combines style and functionality.
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