Los Angeles Housing Market: Trends and Forecast 2025-2026

If you're thinking about buying or selling a home in the City of Angels in 2025, you're probably wondering what the market has in store. My take? The Los Angeles housing market in 2025 is shaping up to be a place where careful planning and understanding the trends will be key. We're not looking at a wild boom or a sudden crash, but rather a more steady, albeit competitive, environment.

As someone who's been watching the real estate pulse of Los Angeles for a while, I see a market that's still dynamic, but perhaps with a bit more predictability than in recent years. After a period of rapid price hikes and intense bidding wars, things are starting to settle into a rhythm. This isn't to say it's going to be easy, but the “frenzy” might be dialing down a notch, creating a more balanced playing field for both buyers and sellers.

Los Angeles Housing Market Trends in 2025:

Home Sales: A Gradual Pick-Up

Looking at the numbers, we're seeing a positive trend in home sales. According to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), in September 2025, California as a whole saw a nice uptick in existing home sales, with a 5% increase from the month before and a 6.6% jump compared to the previous year. For the Los Angeles Metro Area, the picture is even brighter, with sales increasing by 6.2% month-over-month and a solid 10.6% year-over-year. This tells me that more people are buying homes, which is a good sign for the overall health of the market.

I believe this rebound is partly due to mortgage rates holding steady in the low 6% range. When rates dip, even a little, it makes buying a home more accessible for more people. This, combined with buyers who may have been waiting on the sidelines, is contributing to this growing momentum. So, while it might feel like a seller's market in many parts of LA, the increased sales figures suggest that buyers are finding ways to enter the market.

Home Prices: Steadying the Ship

When it comes to home prices, the story for 2025 continues to be one of stabilization rather than runaway inflation. Statewide, the median home price in September 2025 was around $883,640. While this was a small dip from the month prior, it was still up 1.8% from the previous year. Closer to home, the Los Angeles Metro Area saw its median home price at $830,000, showing a 2.5% increase year-over-year.

My feeling is that we're moving away from the record-breaking price jumps we saw in past years. While Los Angeles has always been a desirable place to live, and that demand will always put upward pressure on prices, the market is becoming more realistic. The days of bidding wars significantly above asking price might be less common, but don't expect drastic price drops either. We're likely to see modest, steady appreciation in most desirable areas. Certain neighborhoods or property types might still see stronger growth, but it won't be a universal surge.

Housing Supply: Inventory Still Tight, But Easing

One of the biggest challenges in the Los Angeles housing market has been the limited supply of homes. The Unsold Inventory Index (UII) for California was 3.6 months in September 2025, meaning it would take 3.6 months to sell all the homes currently on the market. For the Los Angeles Metro Area, this figure was 3.7 months, nearly the same as the state average and slightly up from a year ago.

What this means is that while the number of homes available for sale has been growing for a while (up 16.2% statewide year-over-year), the rate of that growth is slowing down. This indicates that even though we're seeing more homes become available, the demand is still keeping pace. In my experience, this means that homes in good condition and priced right will still move quickly. For buyers, this means being prepared and ready to make an offer when the right home appears. For sellers, it reinforces the idea that staging and pricing correctly are still crucial.

Median Days on Market: Homes Taking a Bit Longer to Sell

Previously, homes in many parts of LA were flying off the market in a matter of days. In September 2025, the median days on market for a single-family home in California was 32 days, an increase from 24 days in September 2024. For the Los Angeles Metro Area, homes took an average of 34 days to sell, up from 26 days in the previous year.

This trend of homes taking a bit longer to sell is a welcome development for buyers. It gives them a little more breathing room to make decisions without the intense pressure of immediate offers. It also suggests that the market is moving away from the extreme seller's advantage we saw recently. Buyers have a slightly better chance to negotiate, though it's still not a buyer's free-for-all by any means. Sellers still need to be patient and understand that not every listing will receive multiple offers within hours.

Buyer's or Seller's Market? A Shift Towards Balance

So, are we in a buyer's market or a seller's market in Los Angeles in 2025? My honest opinion is that it's moving towards a more balanced market, leaning slightly towards a seller's advantage.

Here's why I think that:

• Home Sales are Up: More transactions are happening, which is generally good for sellers.
• Prices are Stable/Increasing: While not soaring, prices are holding steady or inching up, giving sellers confidence.
• Inventory is Still Relatively Low: Even with recent increases, the sheer volume of homes available is still not overwhelming. This keeps competition healthy for desirable properties.
• Days on Market are Increasing: This is the key indicator that the extreme seller's market of the past is softening. Buyers have more time and slightly more leverage.

For buyers, this means you'll likely have more opportunities to see homes and potentially negotiate. However, you still need to be prepared for competition, especially for well-priced, updated properties in sought-after neighborhoods. Having your financing in order and being pre-approved will be critical.

For sellers, it means that while the market is still favorable, relying solely on the heated demand of previous years won't be enough. Strategic pricing, effective marketing, and ensuring your home is in top condition will be more important than ever. Understanding the local nuances of your specific neighborhood will also be vital.

Local Insights: Beyond the Overall Numbers

It's crucial to remember that Los Angeles is a massive and diverse region. While the metro area data gives us a broad picture, individual neighborhoods can behave very differently.

• High-Demand Areas: Neighborhoods known for their excellent schools, proximity to job centers, and attractive amenities will likely continue to see strong demand and competitive pricing. Think areas like the South Bay, parts of the Westside, and vibrant urban centers.
• Emerging Neighborhoods: Some areas further inland or those undergoing revitalization might offer more affordable entry points or see more significant price appreciation as they become more desirable.
• Luxury Market: The high-end market often has its own set of trends, influenced by global economic factors and investor sentiment, which can differ from the broader market.

Ultimately, the Los Angeles housing market trends in 2025 suggest a period of sensible growth and greater balance.

Los Angeles Housing Market Forecast: Will Prices Rise or Fall?

You're probably wondering what's going to happen with prices. The Los Angeles housing market forecast suggests a slight decrease over the next year. While the national real estate market may pick up, Los Angeles specifically will likely see some downward pressure on home values. Let's dig into the details and see what factors are shaping the future of housing in LA.

Currently, the average home value in the Los Angeles-Long Beach-Anaheim area is $972,837. That's up about 1.1% from last year, which isn't a huge jump. Homes are going pending pretty quickly, in about 20 days. But, is this trend expected to continue?

According to Zillow's latest projections, here's what they see happening in the Los Angeles housing market over the next year:

Timeframe	Predicted Home Value Change
July 2025	-0.4%
September 2025	-0.9%
June 2025 to June 2026	-1.3%

Basically, Zillow anticipates a gradual cooling off. While it's not a crash, they believe values will edge down a bit.

How Does L.A. Compare To Other California Markets?

Okay, Los Angeles might see a slight dip. But what about other parts of California? Here's a quick look at how the forecast compares to other major metro areas using the same forecast data:

Region	Predicted Home Value Change (June 2025 – June 2026)
San Francisco, CA	-6.1%
San Diego, CA	-1.5%
Riverside, CA	-0.9%
Sacramento, CA	-3.7%
San Jose, CA	-4.0%
Fresno, CA	-1.2%
Bakersfield, CA	-0.1%
Los Angeles, CA	-1.3%

As you can see, Los Angeles' forecasted decline is less than some other California cities, but still a bit downward.

What About the National Picture?

While the Los Angeles housing market faces a slight correction, the national outlook, according to the National Association of Realtors (NAR), is more positive. Their Chief Economist, Lawrence Yun, thinks “brighter days may be on the horizon.” Here's what he's predicting:

• Existing home sales are expected to rise by 6% in 2025 and 11% in 2026.
• New home sales are projected to climb by 10% in 2025 and another 5% in 2026.
• Median home prices are forecasted to continue increasing modestly, with a rise of 3% in 2025 and 4% in 2026.
• Mortgage rates are anticipated to average 6.4% in the second half of 2025 and dip further to 6.1% in 2026.

He considers lower mortgage rates the “magic bullet” for boosting the market.

Will Home Prices Crash in Los Angeles?

Based on these forecasts, a crash seems unlikely. While there seems to be a real estate market slowdown and a price correction, a significant crash seems unlikely. The Los Angeles market is still competitive, and demand remains relatively strong. A slight dip in prices could even be a good thing, making homes more affordable for potential buyers.

Looking Ahead to 2026

Predicting beyond a year is always tricky, but if the NAR's predictions hold true, the Los Angeles housing market could see a slight recovery in 2026. With potentially lower mortgage rates and a growing national market, LA could mirror this trend, evening out back around where it is now. However, local economic conditions and housing supply will play a significant role. It's best to keep an eye on the data and consult with a real estate professional for the most up-to-date advice.

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