Southern California Real Estate Market Update

Market Overview
Over the past 90 days, the Southern California housing market has shifted toward a more balanced environment. While demand remains steady, rising inventory and stabilized mortgage rates have reduced the intensity seen in prior years. Buyers are gaining more negotiating power, while sellers must be more strategic with pricing and presentation.
Inventory Trends
Housing supply has gradually increased across all three counties, easing the extreme shortage of recent years:
Inventory is up approximately 7–10% year-over-year
More homeowners are listing as mortgage rates stabilize
Supply remains below pre-2020 norms, preventing oversupply
Key Takeaway: Inventory growth is creating more options for buyers, but the market is not oversaturated.
Days on Market (Average Time to Sell)
Los Angeles County: ~30–35 days
Orange County: ~25–45 days (trending higher in some segments)
San Bernardino County: ~30–40 days
Homes are still selling at a healthy pace, but not as quickly as during the pandemic-driven market. Pricing and condition are now critical factors.
Pricing Trends
Los Angeles County: Stable with slight softening in some areas
Orange County: Mild downward pressure, especially in higher price points
San Bernardino County: Modest appreciation (~1–2%), driven by affordability
Key Takeaway: Home values remain resilient, but rapid price growth has leveled off.
Buyer & Seller Dynamics
Buyers:
More selective and price-sensitive
Increased ability to negotiate
Benefiting from more inventory choices
Sellers:
Still advantaged by limited supply
Must price accurately to avoid extended market time
Well-prepared homes continue to sell quickly
Mortgage Rate Outlook (2026)
Current rates: ~6.0%–6.5% range
Trend: Stable with potential slight declines
Possible movement into high 5% range later in 2026
Impact:
Improved buyer confidence
Gradual increase in transaction activity
Continued support for home prices
Outlook for the Remainder of 2026
Inventory expected to continue rising modestly
Days on market may increase slightly
Price growth likely flat to +2% range
Market conditions trending toward balanced
Bottom Line
The Southern California market is transitioning into a healthier, more sustainable cycle:
More inventory = more opportunity for buyers
Stable rates = consistent demand
Balanced conditions = realistic pricing expectations
For Buyers: More options and negotiating room For Sellers: Success depends on pricing and presentation