Q1 2025 California Housing Market Update: Prices, Trends, and What Comes Next

The first quarter of 2025 brought significant shifts to California’s housing market, impacting homeowners, potential sellers, and financial decision-makers alike. Understanding current trends and their implications can offer clarity, helping you make informed real estate decisions in this evolving environment. Here, we break down what’s changed, what it means, and how you can strategically navigate these new conditions, guided by insights from real estate expert Don Mowery at The Mowery Group.

Key Takeaways from Q1 2025

Median Home Prices: The average home value in California rose modestly by 2.3%, reaching approximately $788,920 as of March 2025.
Inventory Levels: Housing inventory saw significant shifts, with total active listings at a four-month high. New listings, however, declined slightly from January to February.
Buyer Activity and Mortgage Rates: Mortgage rates experienced a modest decline, hovering between 6% and 7%, which boosted buyer activity and resulted in California’s home sales reaching a two-year high in February.
Regional Variances: Southern California continues to see dynamic shifts, reflecting stronger buyer activity and slightly increased inventory compared to other regions.
Seller and Buyer Confidence: Seller confidence slightly improved due to declining mortgage rates, though buyer confidence remains cautious amid ongoing economic uncertainties.

What These Trends Mean for Homeowners and Investors

Current market dynamics have significant implications for homeowners, sellers, and investors:

Listing Opportunities: With improved seller conditions, including more favorable mortgage rates and increased buyer activity, now may be a favorable time to list homes, particularly if you’ve previously hesitated due to higher rates.
Buyer Leverage: Despite higher prices overall, buyers now enjoy increased inventory, offering more choices and negotiating leverage, potentially leading to better deals.
Equity Trends: Home equity growth is stabilizing, providing homeowners clarity on their current financial positions, crucial for making informed decisions regarding refinancing, equity extraction, or property sales.
Economic Influences: Inflation and mortgage rates are significantly influencing the market. The softening of rates has improved affordability somewhat, but financial uncertainty continues to play a role in buyer and seller decisions.

Insights from Don Mowry and The Mowery Group

Don Mowery emphasizes the importance of accurate, timely property valuations in this fluctuating market. “In periods of economic uncertainty, precise market assessments become even more critical,” says Don. “We’re seeing homeowners and estate managers benefiting significantly from detailed, realistic valuations, helping them make informed decisions about selling, refinancing, or estate planning.”

The Mowery Group continues to provide tailored strategies for clients, aligning their real estate actions with current market conditions to achieve optimal outcomes. Whether managing estate sales or advising on property investments, Don’s expertise ensures clients can navigate this dynamic environment confidently.

What to Watch in Q2 and Beyond

Looking ahead, several factors will shape California’s housing market:

Mortgage Rate Trends: Mortgage rates are expected to stabilize or continue modest declines, enhancing affordability and potentially sustaining buyer activity.
Inventory and Pricing Predictions: Inventory might continue increasing slightly, easing competitive pressures on buyers but moderating price growth.
Advice for Potential Sellers: Sellers considering entering the market should monitor local trends closely and prepare properties thoroughly to attract cautious yet active buyers.

Navigate the Market with Expert Guidance

The current market landscape presents unique opportunities and challenges for homeowners, investors, and financial professionals. Don Mowery and The Mowery Group are here to provide expert insights and reliable guidance tailored to your real estate needs.

Reach out today for a personalized property valuation, home sale consultation, or strategic advice on timing your next real estate move effectively. Trust Don’s extensive experience and deep market knowledge to help you make informed, confident decisions in this evolving California housing market.