Southern California Housing Market Update: What’s Really Happening Heading Into 2026

Southern California’s market is finally exhaling. After years of sprinting, spiking, cooling, and confusing just about everyone, the November 2025 landscape has settled into something we haven’t seen in a while: balance. Not a buyer’s dream. Not a seller’s fiesta. Just a market acting like a normal market again — well, as “normal” as SoCal ever gets.

Let’s break it down without the drama.

Where Things Stand Right Now (Late 2025)

Mortgage rates have drifted down into the 6.1–6.3% range — not low, but at least no longer “ice bucket challenge for your wallet” territory. That small dip gave sales a nudge upward and encouraged some owners to finally list their homes.

Inventory is rising, time on market is stretching to 30–60+ days, and neighborhoods that were flying off the MLS in hours during the pandemic are now actually letting buyers catch their breath.

No crash in sight, though. Demand is still anchored by strong job centers, a lifestyle people will pay for, and the long-running issue of simply not building enough homes.

Current Snapshot by Region

• SoCal, overall:
  Average home price around $860K, slightly down year over year. Inventory is hovering at 3–5 months, and properties are taking anywhere from 32 to 72 days to sell.
• Los Angeles County:
  Prices nudged down (–0.5% to –2.4%). Homes sit 53–61 days on average. Urban cores cooling fastest; the suburban sweet spots are still competitive.
• Orange County:
  Median price $1.2M and still climbing. Slower luxury segment, but overall one of the most resilient counties.
• San Diego County:
  Strongest demand in the coastal zones. Prices up 3–5%. Days on market as low as 13 in hot pockets.
• Inland Empire:
  Riverside and San Bernardino remain the affordability valve for the region. More inventory, slower sales, modest appreciation.
• Ventura County:
  Not as flashy as LA or OC, but steady, predictable demand. Coastal inventory stays tight; inland areas see longer DOM but stable pricing.

Buyer & Seller Signals

• 34% of homes are still selling above list — but that’s down from the pandemic craziness.
• Price reductions are rising, now around 28% of listings.
• Affordability remains brutal — only about 16–20% of households qualify for the median-priced home statewide.

Translation:
Buyers have more leverage, but the market isn’t “cheap.” Sellers can still win, but only if they price smart instead of nostalgic.

Looking Ahead: What To Expect in 2026 (and Early 2027)

If you’re waiting for the market to “take off” again or “finally crash,” don’t hold your breath. The experts — from C.A.R. to Zillow to Redfin — all agree:
The next two years will be steady, boring, sensible real estate.

Here’s what’s projected:

Prices

Expect modest appreciation (+1.5% to +4.6%) depending on the county.
Coastal zones likely land around +3–5%, with the Inland Empire floating around 0–3%.

Sales Volume

Finally rising — somewhere between +2% and +10%, coming off a historically slow 2025. Pent-up demand is real.

Inventory

Should continue ticking up 10–20%, especially now that more sellers are crawling out from under their ultra-low COVID-era rates.

Mortgage Rates

Projected to average 6.0–6.6% in 2026, potentially dipping below 6% if the economy cooperates.

The Big Picture

• 2026 will be a more balanced playing field.
• Move-up buyers get their first true opening in years.
• First-time buyers still have a tough climb, but relief is coming.
• Inland markets offer value; coastal markets hold firm as always.
• 2027 is shaping up as a steady 3–5% appreciation year, barring economic surprises.

What This Means for Buyers and Sellers Right Now

If You’re Buying:

You finally have options. More homes. More negotiation power. And likely slightly better rates ahead. Don’t wait for “perfect,” because perfect doesn’t exist — especially in Southern California real estate.

If You’re Selling:

Price correctly. Don’t get cute. The days of fishing for lottery offers are gone, but serious, qualified buyers are still out there — especially in LA, Ventura, and OC’s most desirable pockets.

Bottom Line

Southern California is shifting into a healthier, more predictable real estate cycle — and that’s a win for everyone who actually wants to make a smart move without all the chaos.

If you want hyper-local insight (because in SoCal, one ZIP code can behave completely differently from the one next door), reach out anytime. I’m always here to help you navigate the market with clarity, strategy, and — when necessary — a friendly reality check.