A view of a diverse range of homes in a California suburb, reflecting the current real estate market trends.
California’s housing market is showing positive signs as active housing inventory surges by 50% compared to last year by March 2025. Despite this growth, inventory remains about 20% below pre-pandemic levels. Nine out of 36 major counties have surpassed their pre-pandemic inventory, providing buyers with more options in those areas. However, challenges persist with economic uncertainties, low affordability, and a predicted continued rise in home prices. New laws aim to alleviate the housing crisis, signaling potential opportunities for buyers in the coming months.
Hey there, California residents! If you’ve been keeping your eye on the housing market, you’ll be pleased to know that things are starting to look a little brighter. By the end of March 2025, California has seen a whopping 50% surge in active housing inventory compared to the same time last year. That means there are more homes available for sale, which is fantastic news for those looking to buy!
Even though California’s housing supply is finally on the upswing, it’s important to note that the state still has about 20% fewer homes available than before the pandemic struck in March 2019. In fact, the national picture shows that while there’s been a 29% increase in active listings nationwide, we’re still around 20% below those pre-pandemic levels.
Taking a closer look at California, we find that out of the 36 major counties—those with at least 100,000 residents—not all areas are seeing the same trends. Nine of those counties have managed to surpass their pre-pandemic inventory levels, while the other 27 are still lagging behind, making the search for homes a bit tricky in those locations.
Now, let’s chat about what this means for buyers. In places with significantly boosted listings, homebuyers are regaining some leverage. For example, cities like San Francisco are experiencing more options, while regions like Orange County haven’t seen the same surge, potentially putting more power in the hands of those house-hunting in the Bay Area.
With California’s median home price hitting $884,350 in March 2025—and reflecting a 3.5% increase from last year—it’s clear that prices are still on the rise. Plus, total active listings in the state recently reached a six-month high, which indicates a turning tide in housing supply!
The unsold inventory index shows that the market is leaning towards a balanced state, which is good news. It suggests that the balance of supply and demand is starting to even out. However, we can’t ignore the role that mortgage rates play in this equation. The average rate for a 30-year fixed mortgage is currently around 6.83%, affecting affordability for many homebuyers.
Looking ahead, experts predict that existing home sales in California could jump by 10.5% this year, leading to approximately 304,400 homes sold! And yes, you guessed it—home prices are also expected to increase, with a forecasted rise of 4.6% to reach around $909,400 by the end of 2025.
Despite these optimistic forecasts, the road ahead isn’t all sunshine and rainbows. Economic uncertainties and regional variations in the market could throw a wrench in affordability and local dynamics. Let’s not forget that the housing affordability index in California is predicted to remain low, with only about 16% of households able to afford the median-priced home.
To tackle the pressing housing shortage, California has introduced some new laws aimed at boosting inventory. These include easing restrictions on building duplexes and streamlining permits for Accessory Dwelling Units. Local governments are now faced with new penalties if they fail to comply with state housing laws, which signals that the state is serious about addressing this ongoing crisis.
In conclusion, while California’s housing market is experiencing some hopeful signs of recovery, there’s still a long way to go. We’re seeing more homes available, but challenges remain in affordability and availability. With buyers gaining some leverage and new laws designed to support housing growth, the coming months might just hold some exciting opportunities for those in the housing market!
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