Right now, the California and Los Angeles housing markets are teetering on the edge of a true buyer’s market. Inventory is climbing fast, prices are softening, and home sales have dropped to levels not seen since the Great Recession. So what’s really going on—and what does it mean if you’re buying or selling in LA?
I’m Scott Himelstein with the Scott Himelstein Group, your trusted Los Angeles Realtor. Let’s break down what’s happening in the LA real estate market in June 2025—and why so many would-be buyers are sitting on the sidelines.
Inventory Is Soaring, Demand Is Shrinking
A balanced housing market typically has six months of inventory—meaning if no new listings came up, it would take six months to sell all the current homes. Just a few years ago, we were sitting around two to two-and-a-half months. Now, in many parts of Los Angeles County and California, we’re hovering near that six-month threshold.
In May 2025, California had over 73,000 homes for sale—the highest since before the pandemic. In LA County, inventory rose 45% year-over-year. But despite more homes on the market, buyer activity hasn’t returned. Home sales remain 40% below the pandemic peak and well under the long-term average.
Why Buyers Are Backing Off
Affordability is the biggest issue. In LA County, only 16% of the population can afford a median-priced home. Mortgage rates hovering around 7% aren’t helping. Buyers aren’t just hesitant—they’re scared. We’re seeing many real-life cases where buyers hit pause due to job insecurity, layoffs, or fears of recession.
It’s not just about numbers. As Oscar Wei from the California Association of Realtors said, this is psychological. Buyers are waiting for mortgage rates to drop or for prices to correct further. In many cases, they’re walking away from deals, even after opening escrow.
The Price Picture: Softening, Not Crashing
Statewide, the median home price in April was $854,700, and values remain up slightly year-over-year. But from March to April, prices dropped for the fourth straight month. Zillow predicts mild value declines in cities like Los Angeles, San Francisco, and San Diego in the second half of 2025—but no crash.
Still, price cuts are becoming more common, and homes are sitting longer—especially if they need work or are priced too aggressively.
What’s Different in Los Angeles?
Despite the doom-and-gloom headlines, homes are still selling in Los Angeles—especially in desirable areas like Porter Ranch. Inventory in the 91326 zip code more than doubled since January, but 40 homes are currently in escrow, and 14 closed in the last month alone.
Move-in ready homes in good condition are still receiving multiple offers. But if your property needs updates or is overpriced, it’ll likely sit.
Final Thoughts
Yes, we’re seeing a shift in the Los Angeles housing market, but it’s not a crash. It’s a reset. We’re moving into a more balanced market, but economic uncertainty, high mortgage rates, and affordability challenges are keeping many buyers on the fence.
If you’re thinking about buying or selling in the Los Angeles area, reach out. I’m Scott Himelstein with the Scott Himelstein Group—here to help you navigate this shifting market with expert guidance and honest advice.
