Despite recent shocks, California's housing market appears to be stabilizing, which could present new opportunities for both buyers and sellers. Experts believe the market is currently balanced, with rising inventory and prices expected to continue their upward trend in 2025. However, buyers may choose to stay on the sidelines, waiting for lower mortgage rates and home prices. Affordability issues are a challenge for homeownership in California.
The median home price in California remains significantly higher than the national average, and interest rates have increased monthly payments, straining buyers' budgets even further.California is also facing a homeowners insurance crisis. Many insurers have been pulling out of the market due to increased wildfire risks and rising costs, leaving homeowners with limited and expensive options. These factors have led to a slowdown in the market and increased inventory of unsold homes. Some experts have an optimistic outlook about the California housing market in 2025, but the ongoing housing affordability challenges, insurance crisis and other issues could be too much of a hurdle for prospective homebuyers. Laura Ratz, senior economist at Moody's Analytics, told Newsweek, house prices in California are expected to slip as the worst of the home sales slump is over and mortgage rates recede. Lower rates will increase demand, but housing supply will also rise, keeping prices at a moderate level.'The modest decline in rates will entice some buyers back into the market, but persistently low housing affordability will keep many on the sidelines,' Ratz said. According to data from Redfin, home prices in California were up 4.2 percent year-over-year in November, with a median price of $827,100. That far exceeds the overall U.S. median price of $429,813. The number of homes sold rose 12.0 percent to 21,078, while the number of homes for sale increased by 1
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