The question seems simple enough: “Is it a good time to buy a house in California?” But after more than two decades as a real estate broker in the Golden State, I’ve learned that the answer is rarely straightforward. I’m David Martinez, and from my office in Pasadena to client meetings across Southern California, I’ve guided hundreds of buyers through this complex decision—one that’s as much about personal circumstances as it is about market conditions.
Let me be clear right from the start: there’s no one-size-fits-all answer to timing the California housing market. What constitutes a “good time” varies dramatically based on your financial situation, long-term plans, and even which of California’s hundreds of micromarkets you’re targeting. That said, I can offer insights into current conditions and help you determine whether 2025 might be your time to make a move.
The Current State of California’s Housing Market: A Balanced Perspective
Let’s start with an honest assessment of where we stand in early 2025:
Price Trends and Stability
California’s median home price currently sits at approximately $835,000—a figure that represents a modest 2.5% increase from the same time last year. This moderate growth follows the more substantial appreciation we saw in 2021-2022 and the relative stabilization of 2023-2024.
What I’ve seen in my years working this market is that different regions are behaving quite differently:
- The Bay Area has experienced slight price declines in some segments, particularly condos in San Francisco proper
- Los Angeles and Orange County have seen minimal appreciation (1-3%) with neighborhood-specific variations
- The Inland Empire and Central Valley continue to outperform coastal markets with 3-5% annual gains
- San Diego remains exceptionally strong with approximately 4% appreciation year-over-year
This regional variation creates both challenges and opportunities for buyers depending on where you’re looking.
Supply and Inventory Dynamics
California’s persistent housing shortage continues to define our market, though with some improvement from the extreme constraints of recent years:
- Statewide inventory sits at approximately 2.9 months of supply (meaning it would take 2.9 months to sell all currently listed homes at the current sales pace)
- This represents an improvement from the 1.5-2 months we saw during the pandemic frenzy
- However, it remains well below the 4-6 months considered a balanced market
My wife Elena, who works in mortgage lending, notes that this inventory constraint remains the single biggest factor supporting prices despite affordability challenges. Simply put, we still don’t have enough homes for the people who want to buy them.
Interest Rate Environment
After peaking above 7% in 2023, mortgage rates have moderated to around 6.1% for a 30-year fixed mortgage as of early 2025. While still significantly higher than the sub-3% rates that fueled the pandemic boom, this represents meaningful improvement in affordability compared to the recent peaks.
For perspective, on a $700,000 mortgage:
- At 3% (pandemic low): $2,951 monthly principal and interest
- At 7.5% (2023 peak): $4,898 monthly principal and interest
- At 6.1% (current): $4,248 monthly principal and interest
This represents a savings of about $650 monthly compared to the recent peak, though still $1,300 more than during the pandemic lows—a significant impact on affordability.
Competitive Landscape for Buyers
The days of frenzied bidding wars and waived contingencies have largely subsided in most California markets, though well-priced, desirable properties can still attract multiple offers. What I’m seeing on the ground:
- The typical home receives 2-3 offers versus 10+ during the pandemic peak
- Contingencies for inspections and financing are again common and accepted
- Days on market have extended to 24-30 days versus 7-10 days during the frenzy
- Price reductions are more common, occurring on about 30% of listings
Between you and me, this creates a much healthier environment for buyers to make informed decisions rather than being forced into risky offers just to compete.
Arguments For Buying in California Now
Several factors suggest that early 2025 may indeed be a good time for certain buyers to enter the California market:
1. The “Mortgage Rate Sweet Spot”
Current mortgage rates represent what might be a sweet spot—lower than recent peaks but potentially not as low as they might go if economic conditions change significantly:
- Rates have declined enough to improve affordability meaningfully
- Further substantial decreases may be limited by inflation concerns
- Waiting for “perfect” rates could mean missing opportunities
I recently worked with a couple who had been waiting for rates to drop below 6%. When rates hit 6.1%, they decided to move forward rather than continue waiting. Their reasoning was sound: even if rates drop another 0.5%, they can always refinance, but home prices in their target neighborhood were beginning to rise again as affordability improved.
2. Improved Negotiating Position for Buyers
Today’s market offers buyers leverage that simply didn’t exist during the pandemic frenzy:
- Ability to negotiate on price (average homes are selling for 97-98% of list price versus over 100% previously)
- Opportunity to request repairs or credits after inspections
- More time to make decisions rather than being rushed
- Sellers more willing to work with contingent offers
This negotiating room often translates to real value—whether through price reductions, closing cost credits, or necessary repairs being completed before purchase.
3. Less Competition in Many Segments
Certain market segments currently offer unusually good opportunities due to temporary reductions in buyer pools:
- Luxury properties ($2M+) are seeing extended days on market and more significant price adjustments
- Condos in urban cores that lost appeal during the pandemic have been slower to recover value
- Properties needing updates or renovations face less competition as higher interest rates have reduced renovation budgets
I helped a client purchase a beautiful mid-century home in Pasadena earlier this year that needed cosmetic updates. During the pandemic boom, this property would have received multiple all-cash offers despite its condition. In today’s market, my client was the only offer and secured the property for 7% below asking price with inspection contingencies intact.
4. Long-Term Appreciation Potential Remains Strong
Despite cyclical fluctuations, California’s fundamental housing dynamics support long-term appreciation:
- Persistent structural housing shortage that will take decades to address
- Land constraints in desirable areas limit new construction
- Strong economic fundamentals in key sectors (tech, entertainment, healthcare)
- Desirable climate and lifestyle factors maintain demand
When I drive through neighborhoods like Silver Lake in Los Angeles or North Park in San Diego showing properties to clients, I’m struck by how little has changed in terms of housing supply over the past decade despite enormous demand growth. This fundamental imbalance suggests long-term ownership will likely be rewarded regardless of short-term fluctuations.
Arguments Against Buying in California Now
Despite these positive factors, several considerations might suggest waiting is the better strategy for some potential buyers:
1. Affordability Remains Historically Challenged
California’s housing affordability metrics remain among the most challenging in the nation:
- The typical home costs about 9-10 times the median household income (compared to 3-4 times nationally)
- Only about 17% of California households can afford the median-priced home using traditional metrics
- The gap between income growth and home price appreciation continues to widen in many areas
For buyers stretching to make monthly payments work, even a modest economic downturn could create financial stress. I always advise clients to ensure they have adequate reserves and are comfortable with their payment even if circumstances change.
2. Economic Uncertainty on the Horizon
Several economic factors create uncertainty for the housing market:
- Ongoing concerns about recession possibilities in late 2025 or 2026
- Tech sector volatility and layoffs affecting high-wage buyers in certain markets
- Inflation pressures that could impact interest rates
- Global economic and geopolitical uncertainties
These factors don’t necessarily mean prices will decline, but they do suggest caution, particularly for buyers with less secure employment or limited financial reserves.
3. Potential for Further Rate Improvements
While timing interest rates is notoriously difficult, some economic forecasts suggest rates could decline further:
- Some economists project rates could drop to the 5.5% range by late 2025
- Each 0.5% reduction in rates improves purchasing power by roughly 5%
- Potential Federal Reserve policy shifts could accelerate rate decreases
My wife Elena cautions buyers about making decisions based solely on rate projections, as these are highly uncertain. However, for buyers who aren’t in a rush, maintaining flexibility to capitalize on potential rate improvements might make sense.
4. Certain Markets May See Price Adjustments
Some California submarkets show vulnerability to price corrections:
- San Francisco condos continue to face challenges with remote work and tech sector adjustments
- Luxury segments in some areas appear overvalued relative to historical metrics
- “Zoom towns” that saw massive pandemic appreciation may experience normalizing prices
- Areas heavily dependent on specific industries facing challenges could see localized corrections
I’ve noticed particular softness in high-rise condo markets in downtown areas that have been slower to recover their pre-pandemic vibrancy. Buyers targeting these segments might benefit from patience.
Who Should Consider Buying Now vs. Waiting: Personalized Guidance
The “right” decision varies dramatically based on individual circumstances. Here’s my guidance for different buyer profiles:
Consider Buying Now If:
Long-Term Holders (7+ Years)
If you plan to own for at least 7-10 years, short-term market fluctuations matter less. California’s long-term appreciation trend has rewarded patient owners through multiple market cycles. I recently worked with a family relocating from the Midwest who purchased in Orange County with a 10-15 year horizon. Their focus was finding the right neighborhood and schools rather than trying to time the market perfectly.
Financially Secure Buyers with Stable Employment
Buyers with strong financial foundations—solid employment, substantial reserves, and conservative debt-to-income ratios—can weather potential market fluctuations. These buyers can take advantage of today’s improved negotiating position without taking undue risks.
Those Finding the “Right” Property
Sometimes the perfect property justifies moving forward regardless of broader market conditions. I helped a client purchase a historic Craftsman in Pasadena earlier this year that rarely comes to market. While the timing wasn’t ideal from a market perspective, the unique opportunity made waiting a riskier strategy than proceeding.
Renters Facing Significant Increases
With California rents rising 5-7% annually in many areas, the rent vs. buy equation increasingly favors ownership for those who can qualify. I worked with a couple whose rent was increasing by $400 monthly. By purchasing, they locked in housing costs and began building equity rather than facing ongoing rent escalation.
Consider Waiting If:
Short-Term Buyers (1-3 Years)
If you anticipate needing to sell within a few years, transaction costs and potential market volatility create significant risk. I generally advise clients with timeframes under 3-5 years to continue renting unless specific circumstances make buying compelling.
Those Stretching Financially
Buyers pushing the limits of their budgets face greater risk if economic conditions deteriorate. I recently counseled a young professional to continue saving for another year rather than purchasing at the absolute maximum of his budget with minimal reserves. Financial security should take precedence over market timing.
Targeting Vulnerable Market Segments
Buyers interested in market segments showing weakness (luxury condos, certain “zoom towns,” etc.) might benefit from patience. I’m currently advising a client interested in San Francisco condos to monitor that market through 2025 as inventory continues to exceed demand in certain buildings.
Those with Flexibility and No Urgent Housing Need
Buyers who are comfortably housed and have flexibility can afford to be strategic. I’m working with a couple currently renting who are watching specific neighborhoods for opportunities while continuing to build their down payment fund, strengthening their position when they do decide to move forward.
Regional Insights: Where Opportunities Exist in 2025
California’s diverse markets offer varying opportunities for buyers in 2025:
Southern California Bright Spots
Inland Empire Value Propositions
Communities like Rancho Cucamonga, Redlands, and Temecula offer relative affordability with strong amenities and improving job markets. I recently helped a family purchase in Redlands for 1.2M+ in coastal Orange County. The husband’s hybrid work arrangement made the location viable despite occasional commuting.
San Diego’s Strong Fundamentals
San Diego continues to benefit from strong employment in defense, biotech, and healthcare sectors. Areas like Chula Vista and Escondido offer relative value while maintaining reasonable commutes to job centers. The stability of the military presence provides a floor for this market even during economic uncertainty.
Los Angeles Emerging Neighborhoods
Areas like Eagle Rock, Leimert Park, and parts of the San Fernando Valley offer value relative to neighboring hot spots. I’m seeing particular opportunity in Northeast LA neighborhoods that benefit from Metro expansion and commercial revitalization.
Northern California Opportunities
Sacramento Region Growth
The Sacramento area continues to benefit from Bay Area migration and state government employment stability. Communities like Elk Grove, Roseville, and Folsom offer strong amenities at price points 50-60% below Bay Area costs. The expansion of remote and hybrid work has made this region increasingly viable for professionals previously tied to Bay Area offices.
East Bay Value Plays
While still expensive by national standards, communities like Richmond, San Leandro, and parts of Oakland offer relative value with good transit connections to San Francisco and Silicon Valley job centers. These areas have shown more price stability than San Francisco proper while maintaining accessibility.
Central Valley Affordability
Fresno, Bakersfield, and surrounding communities offer California’s most accessible price points for single-family homes. The growth of remote work has made these areas viable for more buyers, while local economies have diversified beyond agriculture to include healthcare, education, and logistics sectors.
Strategies for Success in Today’s California Market
Regardless of when you decide to buy, these strategies can improve your chances of success:
1. Focus on Value Rather Than Timing the Bottom
Rather than trying to perfectly time market bottoms (which are only clear in retrospect), focus on finding value based on your specific needs:
- Properties offering unique advantages in location, condition, or potential
- Homes selling below comparable properties due to correctable issues
- Areas with planned infrastructure or commercial development that will drive future value
I recently helped a client purchase a home in Culver City that needed cosmetic updates but was structurally sound. By focusing on “good bones” rather than perfect finishes, they secured a property in a desirable area at a significant discount to updated homes nearby.
2. Secure Financing Before Shopping
In today’s market, having your financing fully secured before making offers provides several advantages:
- Ability to act quickly when opportunities arise
- Stronger negotiating position with sellers
- Clear understanding of your budget constraints
- Protection against potential rate increases during your search
My wife Elena advises all our clients to get fully underwritten pre-approvals rather than basic pre-qualifications. This stronger financing position can make your offer more competitive even against slightly higher bids with less certain financing.
3. Expand Your Geographic Considerations
Many buyers find success by broadening their search areas:
- Consider emerging neighborhoods adjacent to established high-demand areas
- Evaluate commute patterns if working hybrid schedules (perhaps a longer commute is manageable if only required 2-3 days weekly)
- Research school district boundaries to find value pockets within desirable districts
- Explore communities with planned infrastructure improvements that will enhance future value
I worked with a couple initially focused exclusively on Pasadena who ultimately purchased in nearby Altadena. They got substantially more house for their money while still enjoying many of the amenities that had attracted them to Pasadena in the first place.
4. Build in Financial Safety Margins
Given economic uncertainties, building financial safety margins into your purchase is crucial:
- Aim for monthly payments below the maximum you qualify for
- Maintain substantial emergency reserves after closing
- Consider how you would manage payments if income decreased temporarily
- Evaluate worst-case scenarios for property value fluctuations
Between you and me, I’ve seen too many buyers focus exclusively on getting into a property without considering their financial resilience after purchase. The most successful homeowners maintain financial flexibility that allows them to weather unexpected challenges.
5. Consider Creative Purchasing Strategies
In California’s challenging market, creative approaches can create opportunities:
- House-hacking (purchasing a duplex or home with ADU potential for rental income)
- Co-buying with family members or friends to increase purchasing power
- Targeting properties with expansion potential for future value enhancement
- Considering fixer opportunities in otherwise unaffordable neighborhoods
I recently helped three healthcare professionals purchase a triplex in Long Beach. By living in one unit and renting the others, they’ve reduced their housing costs significantly while building equity in a desirable area they couldn’t have afforded individually.
My Personal Perspective After 20+ Years in California Real Estate
After helping hundreds of clients navigate California’s housing market through multiple cycles, here’s my honest assessment of the current buying opportunity:
For financially secure buyers with stable employment and long-term horizons, today’s market offers a reasonable entry point. The combination of moderating interest rates, improved negotiating leverage, and less frenzied competition creates conditions that are more favorable than we’ve seen in several years.
That said, I don’t believe we’re in a “now or never” moment that requires rushing into purchases. The market has normalized to a point where thoughtful decision-making is again possible, and buyers can afford to be selective and strategic.
When my wife Elena and I discuss the market over dinner, we often reflect on how the clients who have been most successful over the years aren’t those who timed their purchases perfectly, but rather those who:
- Bought properties they could comfortably afford
- Selected locations with strong fundamentals
- Maintained financial flexibility throughout ownership
- Focused on lifestyle fit rather than just investment potential
- Held for the long term through market cycles
The question isn’t really whether it’s the perfect time to buy in California, but rather whether it’s the right time for YOU to buy given your specific circumstances, needs, and financial situation.
I still remember helping a young couple purchase their first home in Highland Park back in 2012 when the neighborhood was still considered transitional. They were nervous about the purchase but loved the character of the area and the home. That property has more than tripled in value since then, not because they timed the market perfectly (though in retrospect, they did), but because they bought in an area with strong fundamentals and held through multiple market cycles.
The Bottom Line: A Balanced Time to Enter the Market
Is it a good time to buy a house in California? For buyers with financial stability, long-term horizons, and realistic expectations, I believe the current market offers a balanced opportunity—neither the extreme seller’s market of the pandemic era nor a distressed buyer’s market with plummeting prices.
The best approach is to focus less on timing the market perfectly and more on:
- Finding the right property for your needs
- Ensuring your purchase is financially sustainable
- Selecting locations with strong long-term fundamentals
- Building in financial safety margins
- Being prepared to hold through market cycles
California’s housing market will always have its challenges, from affordability concerns to supply constraints to economic uncertainties. But for those who approach the process thoughtfully and work with experienced professionals who understand these complex dynamics, homeownership in the Golden State continues to offer both lifestyle benefits and long-term financial advantages for those who can enter the market sustainably.
Whether you’re looking at a condo in San Diego, a single-family home in the Inland Empire, or a townhouse in the Bay Area, the key is matching your purchase to your specific circumstances rather than trying to time a market that has historically rewarded long-term ownership regardless of short-term fluctuations.
