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Southern California Housing Market Update: A Look Ahead to 2025
As the housing market adjusts to the Federal Reserve's recent rate cut and a stronger-than-expected economy, we’re seeing signs that point to a more active 2025. According to the California Association of Realtors (C.A.R.), home sales and prices are expected to continue trending upward, driven by lower mortgage rates and steady demand, even as economic growth slows.
C.A.R. 2025 Housing Forecast: Optimism Ahead
At its annual conference, C.A.R. released its 2025 Economic & Housing Market Forecast, projecting a rise in home sales by over 10% next year. Falling interest rates are expected to unlock more inventory, bringing much-needed relief to buyers while encouraging sellers who have been holding off to reenter the market. However, inventory will remain tight compared to historical levels, keeping price growth steady, though more modest than earlier in 2024. In the coming year, home price increases are predicted to fall into the mid-single digits, a relief after the double-digit gains of recent years. And while the economy is not completely out of the woods, it’s currently forecast to avoid a recession—a net positive for housing as we move forward.
New Home Sales Lag, But Outlook Brightens
Despite the recent rate cut, new home sales fell again in August, down by 4.7%, a reflection of typical seasonal slowdowns as families prepare for the holidays. Yet, lower rates and stabilizing mortgage costs have sparked renewed buyer interest in both new and resale homes. In Southern California, pending sales are showing resilience, suggesting an unseasonably strong winter market, with closed sales likely to surge in the final quarter of 2024.
Mortgage Market Reminder: Don’t Wait for the Fed
Though the Fed’s recent rate cuts have been widely anticipated, mortgage rates didn’t respond immediately as many had hoped. In fact, financial markets typically price in expectations before the Fed even makes its move. Mortgage rates had already fallen from their recent highs before the Fed's announcement, and when the rate cut was confirmed, mortgage rates actually ticked up slightly. This trend serves as a reminder for potential buyers: waiting for further rate cuts could be a gamble, as much of the benefit may already be baked into the current rates.
Bond Market Signals Economic Confidence
One key signal of improving economic conditions is the recent shift in the bond market. After two years of an inverted yield curve—often a sign of short-term economic risk—the curve is back in balance, indicating greater confidence in a “soft landing” for the economy. This renewed confidence is further evidence that the economy may avoid a recession in 2025, which would provide a stable foundation for continued growth in the housing market.
Looking Forward
As we head into the end of 2024, the housing market in Southern California is showing resilience. With falling rates, stable prices, and cautious optimism around the economy, 2025 could be a year of opportunity for both buyers and sellers. If you’ve been waiting for the right moment to make a move in the housing market, this could be your chance.
If you have any questions about how these trends could affect your home buying or selling decisions, feel free to reach out!
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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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700 E Ocean Blvd #1706
Long Beach 90802
2 Bed | 2 Bath | 1080 SF | $940,000
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.
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1187 E 3rd St #111
Long Beach 90802
2 Bed | 2 Bath | 1039 SF | $2,650
Looking for the perfect beachside home? Look no further than this beautiful two-bedroom, two-bathroom condo located in Alamitos Beach! Just six blocks to the beach, this home is perfectly situated for those seeking a coastal lifestyle.
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939 E Appletong St #8
Long Beach 90802
2 Bed | 2 Bath | 900 SF | $2,500
Discover this delightful top floor condo in the heart of Alamitos Beach. Just steps from the beach, East Village, Retro Row, and Shoreline Village, this two-bedroom, two-bathroom gem offers a cozy and inviting living space.
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488 E Ocean Blvd #P9
Long Beach 90802
1 Bed + Bonus Room | 1.5 Bath | 1447 SF | $799,900
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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3503 Marber Ave.
Long Beach 90808
3 Bed | 2 Bath | 1553 SF | $1,050,000
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 | $689,900
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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6713 E Almada St
Long Beach 90815
4 Bed | 3 Bath | 2136 SF | $1,174,900
Welcome to Your Dream Home in Los Altos! This stunning 4-bedroom, 3-bathroom, 2-story home is a rare find in the highly sought-after Los Altos community. Conveniently located near Belmont Shore, this home offers easy freeway access, making commuting a breeze. You'll be close to parks and highly rated schools, perfect for families and outdoor enthusiasts alike.
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6600 Warner Ave #182
Huntington Beach 92647
1 Bed | 1 Bath | 765 SF | $425,900
Highly sought after top floor condo at Villa Warner iin Huntington Beach! This beautiful condo offers plush carpeting, smooth ceilings, recessed lighting, large living room with sunny balcony! Villa Warner is a gated community and offers a large pool, spa, cooking area, weight room, billiards room, Extra storage, close to the Ocean, shopping & restaurants.
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525 E Seaside Way #1508
Long Beach 90802
2 Bed | 2 Bath | 1030 SF | $790,000
Enjoy breathtaking ocean views from the living room, bedrooms and the patio in this modern luxury 2 bed, 2 bath highrise condo. Short distance to the beach, harbor, Shoreline Village, Terrace Theater, restaurants, nightlife, and so much more!
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