The Southern California housing market in 2025 remains one of the most watched in the nation. With median prices hitting all-time highs in some areas and inventory slowly improving, sellers are navigating a market that's evolved significantly from the frenzied pandemic years. Here's what you need to know if you're considering selling.
Median Home Prices by Region
Southern California's housing costs continue to vary dramatically by location.
Los Angeles County
The median home price in Los Angeles County has reached approximately $900,000-$940,000, with year-over-year appreciation of 3-4%. While growth has moderated from the double-digit gains of 2021-2022, prices continue climbing steadily.
Specific submarkets show even wider variation:
- Coastal communities command premiums well above the median
- San Fernando Valley and South Bay remain competitive
- Inland areas of LA County offer relative affordability
San Diego County
San Diego's median home price hovers around $800,000, with price gains of approximately 5% year-over-year. San Diego remains one of the hottest markets in the region, characterized by:
- Very low inventory (under 2 months of supply in desirable areas)
- Strong demand from military and tech sector employment
- Persistent shortage of new construction
Orange County
Orange County leads the region with median home prices near or exceeding $1 million. The county has seen approximately 5% price gains, driven by:
- Limited buildable land
- High-income employment base
- Strong school districts
Inland Empire (Riverside/San Bernardino)
The Inland Empire continues to offer relative value, with median prices significantly below coastal counties. Buyers priced out of LA and Orange County have driven steady demand, though the region has seen inventory improvements in 2025.
Inventory: The Key Market Driver
The defining feature of Southern California's housing market has been chronic inventory shortage. Understanding current inventory dynamics is essential for sellers.
The Lock-In Effect
Many homeowners with mortgage rates below 4% are reluctant to sell and give up their favorable financing. This "lock-in effect" has kept a significant number of properties off the market, contributing to:
- 2.8-3.0 months of supply in key markets (compared to the 5-6 months considered balanced)
- Multiple offer situations for well-priced homes
- Limited negotiating power for buyers
2025 Inventory Trends
There's some relief on the horizon. According to California Association of Realtors data:
- Active listings rose at the fastest pace since January 2023
- The Unsold Inventory Index reached 3.5 months in April 2025 (up from 2.6 months a year earlier)
- Housing supply is projected to approach pre-pandemic levels by 2026
For sellers, this means the extreme seller's market is moderating—but it's still tilted in your favor.
What This Means for Sellers
Pricing Still Matters
Even in a seller's market, overpricing can backfire. Homes priced correctly are selling quickly, while overpriced listings sit. Work with local data to understand:
- Recent comparable sales
- Current active competition
- Days on market for your neighborhood
Condition Expectations Have Shifted
During the pandemic frenzy, buyers waived inspections and accepted homes in any condition. That's changed. Today's buyers are:
- More likely to request repairs or credits
- Conducting thorough inspections
- Walking away from overpriced or problem properties
If your home needs significant work, factor repair costs or pricing adjustments into your expectations—or consider selling to a cash buyer who purchases as-is.
Timeline Considerations
Average days on market vary by price point and condition:
- Well-priced, move-in-ready homes: 2-4 weeks to offer
- Homes needing work or priced aggressively: 60+ days
- Luxury properties: Longer timelines typical
Looking Ahead: 2026 Forecast
The California Association of Realtors forecasts:
- Median home prices rising 3.6% to $905,000 statewide in 2026
- Continued inventory improvement toward pre-pandemic levels
- A more balanced (but still seller-favoring) market
Interest rates will remain a key variable. If mortgage rates decline, buyer demand could surge—but so might seller activity as the lock-in effect weakens.
Selling in Today's Market
Whether you're relocating, downsizing, or dealing with a life change, Southern California's market fundamentals remain strong. The key questions to ask yourself:
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What's my timeline? If you need to sell quickly, the traditional market's 2-3 month average may not work.
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What's my home's condition? Move-in-ready homes command top dollar; fixer-uppers face steeper discounts.
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What's my priority? Maximum price (traditional sale) vs. speed and certainty (cash sale).
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What are my holding costs? Mortgage payments, taxes, insurance, and maintenance add up while waiting for the right buyer.
The Bottom Line
Southern California's housing market in 2025 remains healthy for sellers, with strong demand and prices near all-time highs. However, the frenzied multiple-offer situations of 2021-2022 have moderated. Sellers who price correctly and present well-maintained homes continue to achieve excellent results.
For sellers who need speed, certainty, or prefer to avoid the traditional process, cash buyers remain an alternative worth exploring—especially for properties that might struggle on the traditional market due to condition, tenant situations, or other complications.
Understanding your local submarket's specific dynamics is essential. What's true in coastal Manhattan Beach differs dramatically from the Inland Empire. Whatever path you choose, informed sellers make better decisions.