Why this matters: 2025’s lackluster spring sales bounce continues years of substandard home sales since the 2021 pandemic buying frenzy. Buyers have lost purchasing power to the highest mortgage rates and asking prices since 2013. In turn, for-sale inventories have and will continue to pile on — until sellers drop asking prices or exit the market.
Depleted buyers a drag on sales volume
In August 2025, 24,000 escrows closed for new and resale residential transactions across California. Home sales volume in August was 5.2% lower than the same month one year earlier.
Importantly for trends, year-to-date (YTD) sales volume through August 2025 only declined 1.0% from the 2024 YTD sales figure. The more significant decline in August sales volume from earlier months suggests the buyer retreat has accelerated since the anemic spring bounce.
2025 sales volume YTD is trending a significant 34% lower than 2019 — the last normal year before the economic tsunami of the 2020 pandemic upended real estate sales.
Related chart:
Recent home sales trends
Consider that annual home sales experienced a 6% bounce from 2023 to 2024. More critically, sales volume in 2024 was 27% below 2019 — the last year of the previous sales cycle.
Today, buyers are waiting until they sense the decline in pricing is over, evidenced when prices bottom and begin to rise. Be aware your typical homebuyer today knows their math for income-to-mortgage leveraging to set home pricing, thanks to readily available data.
The ongoing public uncertainty about political upheaval, trade taxes and immigration hostilities has placed downward pressure on owner and tenant turnover, and thus sales volume. The property sales market will suffer from this rigor mortis until speculators return to the real estate market and stop prices from dropping.
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Today’s sales volume strikes at pricing
Watch for home sales volume to further trail off by the end of 2025, as the seasonal dip combines with buyer caution due to deteriorating employment conditions.
When home prices begin to decline across all pricing tiers, not just the high tier now underway, recent homeowners with little down payment can only watch as the equity in their home slides into the red.
This pricing-to-mortgage crossover event is not likely to begin until a nationwide economic recession brings on a pointed drop in the number of Californians employed. Further, watch the slow upward trend from very low numbers of mortgage foreclosures as a force compelling owners to sell in the future.
Once prices drop, sales agents can expect today’s ongoing real estate stagnation to eventually bring about a return of real estate speculators to produce a “dead cat” bounce in both sales volume and pricing. Within 12 months following the speculator-driven market bounce, home prices historically slip as homebuyers wait and watch before prices bottom that year. It is then that a sustainable sales volume and pricing recovery takes over with the return of end-user homebuyers — and temporarily lower mortgage rates.
