It’s May 2025, and there’s a noticeable shift happening in the Los Angeles real estate market. After years of limited inventory and intense bidding wars, buyers now have more options—but also more hesitation. While interest rates remain a factor, they’re no longer the only thing holding people back. A wave of uncertainty—ranging from economic shakeups and industry layoffs to tariffs and city-wide budget concerns—is making buyers second-guess their timing. So, what does that mean for you if you’re thinking of buying or selling?
Let’s talk inventory. Active listings across Los Angeles County are up nearly 25% in just the last three weeks. That means more choices for buyers and less leverage for sellers. In Porter Ranch (zip code 91326), a diverse neighborhood with price points from under $1M to over $3M, 69 homes have closed this year so far. Of those, nearly half sold for $1.25 million or less. That’s where the sweet spot is right now—homes above $1.35 million are seeing far fewer buyers and longer time on the market.
Why? Because affordability is being squeezed. Interest rates have bounced between the high 6% and low 7% range, dramatically impacting monthly payments. A $1.25M home with 20% down often requires a household income of over $250,000—assuming no debt. For many, that’s just not realistic.
As a result, days on market are rising. In Los Angeles County, average DOM has climbed from the low 20s to over 35 days, and even higher in Porter Ranch. Sellers who priced based on early 2024 comparables are finding that today’s market is very different. The March market is not the May market. In fact, many homes now need to be priced under the last comps to attract serious offers.
Yet, not all market segments are equal. Entry-level homes—especially those priced under $1.25M—are still selling quickly if they’re well-presented and priced correctly. At the luxury level, however, it’s a different story. Homes over $1.5M are sitting longer unless they offer rare features like sweeping views, pools, or custom upgrades. One Westcliff home in escrow now even features a lazy river—and yes, unique properties like that still generate buzz.
New construction homes also continue to surprise. Despite high base prices, many are moving quickly—especially those in the $1.7M to $3M range—thanks to builder incentives like rate buydowns, design credits, and other perks. These buyers tend to be move-up homeowners with substantial equity—not first-timers.
Bottom line? The LA market isn’t crashing, but it is recalibrating. Buyers are more cautious, sellers need to be more strategic, and everyone needs to be realistic. In this environment, pricing, presentation, and patience are everything.
If you’re planning to buy, don’t sleep on a home that truly fits your needs. If you’re selling, now more than ever, you need the right game plan. Reach out to the Scott Himelstein Group to learn how our proven strategies can help you succeed in today’s shifting market.
