As we look ahead to the housing market trends in California, predictions from the California Association of Realtors suggest that the median price for single-family homes is set to reach $909,400 by 2025. This marks a 4.6% increase from the 2024 median of $869,500, widening the gap from the national median of $412,300. The upward trend in prices shows no signs of slowing down in the coming years.
Historically, California, along with Hawaii, Massachusetts, and Washington D.C., ranks among the highest in real estate prices in the United States. The association predicts that housing supply will struggle to meet the growing demand for homes, especially as mortgage rates are expected to decline, allowing California’s prices to remain ahead of those in other regions.
Looking for solutions, state officials have assessed that an additional 2.5 million housing units will be needed over the next eight years to meet market demands, posing a significant challenge. Analysts and real estate agents warn that as demand continues to rise, competition within the housing market will only intensify.
Laurie McCarty, a real estate agent in Bakersfield, highlights her city and its neighboring areas as some of the most affordable metropolitan regions in California. However, with an influx of new residents, the price of single-family homes in Kern County has surged by 60% over the past five years.
“Many people who can’t afford homes in Los Angeles or the Bay Area are choosing to settle in Bakersfield, and now even locals are finding it hard to buy,” McCarty noted. “There’s a prevailing concern that outside investors are driving up prices, but for now, it’s still manageable, with the median price for single-family homes around $400,000.”
In stark contrast, properties in the San Francisco area are now considered rare at $900,000, given that the median price has reached $1.5 million.
Michael Bellings, a Bay Area agent, indicated that buyers are still hesitant and waiting for the effects of reduced interest rates to materialize. While sellers might be listing properties at prices reflective of five years ago, the current pricing still feels too steep for many buyers.
Recent surveys from Bay Area News Group and Silicon Valley Joint Venture reveal that 47% of respondents are considering moving, with an overwhelming 96% agreeing that high prices pose a serious issue.
The San Diego metropolitan area mirrors these sentiments, as the current median price has climbed to $1.1 million. However, Mike Safiedine, another agent, believes there are still buyers eager to live in this region and anticipates a noticeable increase in transaction volumes, potentially driving prices higher next year.
