California’s Housing Market in 2025: Slowing Growth, Persistent Challenges

The housing market in California is showing signs of change. While home prices remain near record highs, growth is moderating, inventory remains constrained, and affordability continues to bite. Below are key take-aways and what they mean for professionals in the field.

Key trends to watch:

• Home sales and new listings are still sluggish in many California metros. For example, new home listings dropped by more than 17% year-over-year in cities including San Francisco, San Diego, Riverside and Anaheim. The result: a market that’s described as “stuck in molasses.” CalMatters
• The statewide median home price is forecast to reach about $909,400 in 2025 — an increase of approximately 4.6% from 2024 — as per California Association of REALTORS® (C.A.R.) data. California Association of Realtors
• Inventory remains a major issue. Many homeowners are “locked in” with ultra‐low interest rates and are reluctant to sell, limiting supply. Bay Legal PC+1
• Though prices aren’t expected to crash, the pace of appreciation is slowing. For instance in Southern California the forecast is for modest growth (2-4%) rather than double‐digit gains. Norada Real Estate

Implications for you as an agent or broker:

• Buyers’ expectations need to be managed. With slower growth, the “boom market” dynamic is changing. Providing clients with realistic scenarios around pricing and timing will be critical.
• Sellers may need more strategic positioning. Since growth is moderating, sellers should understand how price, condition, and timing interact in the current climate.
• Inventory strategies matter more than ever. With supply still tight, proactively sourcing listings, targeting motivated sellers and leveraging off-market opportunities can give an edge.
• Local market nuances are essential. California is not monolithic — the Bay Area, Southern California and inland regions each have different trajectories. For example: the Bay Area is seeing small dips in some sub-markets even as the broader state holds steady. Element Homes+1

Bottom line:

The California market in 2025 is less about explosive growth and more about resilience plus adjustment. Agents who adapt by emphasising service, clarity and strategic counsel — rather than relying on momentum alone — will thrive.

👉 Read the full article:

California’s housing market is still in a rut. Here’s why.