S2: E7 - 2025 Real Estate Market Forecast: What Buyers & Sellers Need to Know

[Music] Welcome back to the podcast. The 2025 Real Estate Market is Shifty, rising mortgage rates, changing home prices, and new inventory trends are shaping the year ahead. So what does that mean for buyers and sellers? As one Buffet once said, the best investment you can make is in yourself, and when it comes to real estate, knowledge is power. That's exactly why I'm here to help you stay informed, make confident decisions, and navigate this evolving market with ease. In today's episode, we're breaking down expert insights, market trends, and strategic moves you can take in 2025 to stay ahead. Let me ask you, have you ever wondered if now is the right time to make a move in real estate? Are you curious about where home prices and interest rates are added? If so, you're not alone. I'm Audrey Murphy, a passionate and experienced real estate agent with exp royalty, and I'm here to guide you through the exciting, sometimes overwhelming, and always rewarding world of real estate. California DRE No. 01865349, and Idaho License SP 57777. My goal is to equip you with the knowledge and insights you need to make confident decisions when deciding to sell or buy a loan. I've been helping buyers and sellers navigate the real estate market since 2009, and I'm committed to providing you with the most accurate up-to-date information so you can make the best decision for your future. Today we'll be breaking down insights from top experts, including Jordan Levine, senior VP and chief economist at the California Association of Realtors, and highlights from the latest housing matters podcast episode, 2024 in review, and 2025 outlook. We'll cover interest rates, home prices, inventory trends, and the economic factor shaping California's 2025 real estate landscape. By the end of this episode, you'll have a clear understanding of what's ahead, and the next steps to take if you're planning to buy yourself in 2025. Here's my disclaimer, real estate markets shipped constantly, and by the time this podcast airs, some of this data may have already changed. While I strive to provide the most current insights, I always recommend speaking with the real estate professional or checking the latest market reports before making any major decisions. So let's dive in. The California housing market had a rough start to 2025. Market rates climbed in the first two weeks of a year, and the devastating wildfires in Southern California destroyed thousands of homes impacting the market significantly. Statewide home sales pulled back in January, reaching their lowest level in 13 months. Sales decreased by 10% from December 2024, and was the biggest dip in 30 months. Open Espo sales also dropped compared to the previous year, marking the largest year over year, declined in 14 months. Despite the slow start, the market is expected to pick up as we enter the spring home buying season. While mortgage rates we mean elevated, they have trended downward over the past four weeks after hitting a recent peak. Interest rates will likely moderate later this year, but concerns over tariffs in inflation could slow that progress. One key factor to consider is that buyers and sellers are beginning to accept that the days of 3% mortgage rates are behind us. Many are adjusting their expectations, and as long as the economy remains strong, we should see housing demand increase in the next 12 months. Now let's talk about the inventory. The mortgage lock-in effect where homeowners hold off selling due to having lower locked-in interest rates is still in place, but it's beginning to loosen up. New active listings surged at the sharpest year over year growth rate in 45 months in January. As the spring home buyer season kicks off, inventory should continue to increase. While supplies will still remain below historical norms, we could see a 10% rise in available listings if market conditions stabilize. This shift is important because more homes on the market will help balance supply and demand. However, inventory shortages will still apply upward pressure on home prices. Home prices in 2025. California's median home price climbed in in January with the year over year gain exceeding the six-month average recorded between July and December of 2024. Experts predict further price growth in the coming months. Assuming mortgage rates decline slightly in 2025, home prices are projected to rise 4.6 percent, bringing the state's medium home price to $905,200. Looking at the expert insights in market expectations, Jordan Levine, Senior Vice President and Chief Economist of the California Association of Realtors, reinforces that the market is stabilizing but remains competitive. While inventory is expected to loosen as rates ease, demand will also increase keeping prices elevated. Price growth will be slower that the ongoing housing shortages will sustain a competitive market. This is a quote from Jordan Levine. What does this mean for buyers and sellers? Let's break it down. If you're planning to buy a home in 2025, here's how to stay ahead. First and foremost, get pre-approved early. More buyers will enter the market as rates stabilize. Lock in your pre-approval now to stay ahead of the competition. Be flexible. Inventory is improving but competition remains. Be open to different neighborhoods or property types. In last, look for motivated sellers. Some sellers may be willing to negotiate on price, closing costs or repairs. If you think it is selling in 2025, keep these strategies in mind. Price strategically, buyers are more price conscious. Listing that the right price from the start will attract serious offers. Boost your curb appeal with more homes entering the market, small updates like fresh paint and landscaping can help your home stand out. Consider market timing. Spring and summer remain top-selling seasons but with rates easing, late 2025 could also be a strong time to sell. So my final thoughts for this episode? The 2025 California housing market is starting off with challenges but is expected to strengthen as the year progresses. If you want a personalized market update, visit AudreMurphy.com to check current trends in your city, county or zip code. For precise estimate, enter your address and receive a detailed home evaluation report. But remember, the system doesn't know your home. So it's best to reach out to your real estate agent and have them do an accurate comparative market analysis with current data in your area. If you're thinking about buyers selling, let's connect. I would love to help you. Email me at [email protected] or give me a call at 916-595-7885. That's it for this week's episode. If you found this information helpful, be sure to subscribe so you never miss an update. Until next time, stay informed and stay ahead.