Los Angeles & Orange County Real Estate Mid-2025: Finding Balance in a Shifting Market
As we move through the second half of 2025, the Los Angeles and Orange County housing markets are experiencing a period of recalibration. The pandemic-era real estate surge has given way to a slower, more deliberate market — one defined by higher mortgage rates, cautious buyers, and a gradual rise in home inventory.
“The housing market is at a turning point,” says Nadia Evangelou, senior economist and director of real estate research at the National Association of Realtors. This turning point offers both challenges and opportunities. Whether you’re buying, selling, or simply tracking your neighborhood’s trends, understanding these shifts is key to making smart decisions.
In this localized update, we’ll explore the four factors shaping Los Angeles and Orange County real estate right now — and how you can navigate them strategically.
1️⃣ Home Sales Are Down, But Activity Is Picking Up
While overall home sales in Los Angeles and Orange Counties remain below pre-pandemic levels, there are early signs of renewed activity.
According to the California Association of Realtors (C.A.R.), existing single-family home sales in Los Angeles County rose 3.2% in May 2025, while Orange County posted a 1.7% increase from the previous month. Median home prices, meanwhile, held steady — $830,000 in Los Angeles County and $1.26 million in Orange County.¹
This slow-but-steady rebound suggests that buyers are returning to the market, encouraged by stabilizing mortgage rates and a slight increase in available inventory.
What this means for you:
Buyers: Fewer bidding wars and more listings mean greater leverage and room to negotiate — especially in neighborhoods like Lakewood, Long Beach, and Fullerton, where listings are sitting slightly longer.
Sellers: Overpricing can stall your listing. Success now depends on realistic pricing, strong staging, and targeted marketing tailored to local demand.
2️⃣ Mortgage Rates Remain High, But Stability Is Returning
Mortgage rates in California remain elevated compared to pre-2020 levels, hovering around 6.5% for a 30-year fixed loan.² Although affordability remains a challenge, the rate volatility that defined 2023–2024 has finally settled.
In Los Angeles and Orange Counties, many lenders are reporting increased use of rate buydowns and seller credits to help offset monthly payments. Builders and sellers alike are offering concessions to attract budget-conscious buyers.
What this means for you:
Buyers: Waiting for 4% rates to return isn’t realistic in the near term. Focus on locking a manageable rate now and consider refinancing if rates decline later.
Sellers: Offering mortgage incentives or closing cost support can help your home stand out. We can help you calculate the potential return on those concessions.
3️⃣ Inventory Growth Creates New Opportunities
One of the biggest changes in 2025 is the rise in active listings. Across Los Angeles County, inventory is up 27% year-over-year, and Orange County has seen a 22% increase.³
Buyers now have more homes to choose from, particularly in mid-priced communities such as Anaheim, Long Beach, and Whittier. However, premium coastal areas — from Newport Beach to Manhattan Beach — remain competitive, with well-priced homes selling quickly.
Redfin’s May 2025 report noted that the balance of power in Southern California is “tilting toward buyers,” as homes take longer to sell and price reductions become more common.⁴
What this means for you:
Buyers: The expanded inventory means more choices and negotiating power. It’s a great time to explore neighborhoods you might have overlooked a year ago.
Sellers: This is not the time to “test the market.” Homes that show well and are priced right from the start attract the most qualified buyers.
4️⃣ Home Prices Hold Strong, But Modest Softening Ahead
Home values in Los Angeles and Orange Counties remain historically high, though the pace of appreciation has cooled.
C.A.R. projects that median home prices in Southern California will dip about 1% by year-end, reflecting a modest correction — not a crash.¹ In fact, Zillow forecasts flat to slightly positive growth for Orange County through early 2026, bolstered by limited new construction and strong regional job markets.⁵
What this means for you:
Buyers: Don’t expect dramatic price drops. Focus instead on identifying homes that have been on the market for 30+ days, where sellers may be open to negotiation.
Sellers: Market realism is key. The 2021 bidding-war days are gone — but well-presented, move-in-ready homes in desirable areas are still commanding premium prices.
Special Consideration: Insurance & Wildfire Zones
Southern California’s changing insurance landscape continues to affect both buyers and sellers. Following the 2025 Palisades and Eaton Fires, many insurers have tightened underwriting standards in hillside and canyon areas. Premiums have risen across much of Los Angeles and northern Orange County.⁶
What to know:
Buyers should obtain insurance quotes early in the home search process.
Sellers can add value by showcasing wildfire mitigation efforts — such as cleared brush, ember-resistant vents, and defensible space certifications.
Your Strategic Move for 2025
Real estate success in Los Angeles and Orange Counties depends on localized strategy — not national headlines.
If you’re buying: You now have more options and negotiating power than at any point in the last three years.
If you’re selling: Strategic pricing, digital marketing, and buyer incentives will make all the difference.
If you’re holding: This is a good time to assess your home equity or refinance if your current rate is above 7%.
Whether you’re in Long Beach, Huntington Beach, Pasadena, or Yorba Linda, understanding hyper-local data is key. As neighborhood specialists, we can help you analyze market shifts, compare school district data, and assess where buyer demand is heading next.
Local Resource
Stay updated with the California Association of Realtors’ Southern California Market Reports, which track sales, pricing, and inventory for both Los Angeles and Orange Counties:
🔗 C.A.R. Regional Housing Data Center – Los Angeles & Orange County (2025)
Source Links & Notes
C.A.R. regional housing data / April & May 2025 (Los Angeles & Orange County)
– “Housing tracker: Southern California home prices largely flat in April” (Latimes) — shows regional price trends and slow growth. Los Angeles Times
– “May home sales and price report – California Association of Realtors” — provides monthly statewide sales & price data. California Association of RealtorsMortgage / affordability / home payment increases in California
– “California Housing Affordability Tracker (2nd Quarter 2025)” — shows mid-tier home payments exceeding $5,900/month, up ~82% from January 2020. Legislative Analyst's OfficeInventory growth in California / SoCal markets
– “Inventory of Homes for Sale in Biggest California Markets Suddenly Piles Up to Highest in Years” — reports active listing spikes (51% yoy in CA) and rising supply. Wolf Street
– “Market Update Los Angeles – Amalfi Estates (June 2025)” — reports Orange County with ~74.68% year-over-year inventory increase, Los Angeles ~49.83%. Amalfi EstatesPrices softening / flat growth in Southern California
– “Housing tracker: Southern California home prices largely flat in April” (Latimes) — region’s prices up only ~0.7% year-over-year. Los Angeles Times
– “Los Angeles Housing Market: Forecast and Trends 2025-2026” (Norada Real Estate) — trends & forecasts for LA & SoCal. Norada Real EstateOrange County / local market data
– “Orange County, California Housing Market Report June 2025” (Rocket) — median home price, price-per-square-foot, and local trends. Rocket
– “Orange County Real Estate Market Report and Trends” (O C Real Estate Inc.) — inventory & days-on-market details. Ocrealestateinc.comWildfire impact / insurance risk in L.A. / SoCal
– “Over $50 Billion Worth of Los Angeles Homes Were Impacted by the January Wildfires” (Redfin) — wildfire damage magnitude in L.A. Redfin
– “What Fires Will Do to California’s Housing Market” (Newsweek) — discusses wildfire losses, insurance pressures, and housing supply effects. Newsweek
– “Older Homes for Sale in California Now Come With Wildfire …” (Insurance Journal) — context about homes in fire-prone zones and insurance challenges. Insurance Journal