Features Overview

 

Fall 2025 Real Estate Update

As we step into the final quarter of 2025, Southern California’s housing market continues to evolve. Whether you're buying, selling, or simply watching the trends, here’s what you need to know about mortgage rates, inventory dynamics, and what’s ahead for 2026.

Mortgage Interest Rates: Easing, But Still Elevated

  • As of October 14th, 2025, the average 30-year fixed mortgage rate sits at 6.4%.

  • Rates have ticked up slightly in recent weeks but remain lower than earlier highs in 2025.

  • Economic indicators suggest the Federal Reserve may lower rates by 50 basis points before year-end, potentially easing borrowing costs further.

  • On October 14th, 2025, Powell signaled the end of QT (Quantitative Tightening) which directly impacts the 10-year Treasury rate and thus borrowing costs.

What this means for you: Buyers may find slightly better affordability heading into winter, while sellers should prepare for more rate-sensitive negotiations (i.e., buyers requesting assistance in their offers for a mortgage rate buy-down).

Inventory & Market Activity: A Gradual Rebalancing

  • After years of tight supply, inventory is slowly increasing, offering buyers more options.

  • However, competition remains strong, especially in desirable neighborhoods especially in coastal areas.

  • Home prices have stabilized, with the median price in Los Angeles County reaching $930,720 in August, up 1.2% year-over-year. Orange County was $1,385,000, down 1.1% year-over-year.

What this means for you: Some sellers still benefit from stronger demand, but pricing strategies must be sharp. Most agents surveyed (77%) said the biggest mistake sellers make is overpricing. Buyers should act quickly on well-priced listings before year-end.

Looking Ahead: Forecast for 2026

  • The California Association of REALTORS® projects a 2% increase in home sales statewide for 2026.

  • Median home prices statewide are expected to rise 3.6%, reaching $905,000 next year.

  • Housing affordability is forecast to improve slightly, climbing to 18% in 2026 from 17% this year.

What this means for you: The market is expected to remain steady, with modest growth and improved affordability. Strategic timing and preparation will be key for both sellers and buyers. Personally, I believe, based on what I've been tracking, if and when rates drop to 5% or less, the entire market dynamics will change since 79% of homeowners are sitting on rates below 5%.

Final Thoughts

Homes that are turnkey, priced right, and move-in ready condition, are selling within 7 to 14 days at list price. Dated homes, many in disrepair, are usually overpriced and sitting unsold for 60 to 90 days. If and when they do open escrow, 28% fall out of contract due to inspections uncovering major issues.

What this means for you:Sellers should ensure their homes are ready for market before listing it but wait until after the holidays for best possible price and a swift sale. Buyers should stay focused, do their due diligence, and prepare to scoop up a possible deal from now until December 31stwhile competition is less and sellers are more willing to negotiate. As an investor, this is when I usually find my best deals! I currently have my eye on another investmentproperty, which I plan on buying before the year end.


Don't hesitate to get in touch with any questions about your planning, preparation, or personalized goals for 2026.

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