Why this article is important: The number of homes sold is a barometer for housing market conditions. This article provides a glance back at recent sales volume and looks ahead for a take on 2026, and beyond.
Three years of rigor mortis, three more of opportunity
The number of homes sold in 2025 was essentially flat compared to the year prior, and the prior year. More critically, sales volume in 2025 lingered a substantial 27% below 2019 — the last year California experienced a “normal” housing market, prior to the pandemic drop-off in 2020 and flashback in 2021.
2025 marks the third year of flat sales, with static property prices and a distorted economic outlook encouraging willing and able homebuyers to “wait and see.”
In the single month of December 2025, California saw 22,100 escrows close for new and resale home transactions. This was a slight 2.2% below the same month one year earlier, amounting to 500 fewer home sales.
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Today, buyers are waiting until they sense the present decline in pricing has passed, 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 insights.
The developing public uncertainty about political upheaval, trade taxes and immigration hostilities tamps down owner and tenant turnover, and thus sales volume. Expect property sales to suffer from buyer rigor mortis until real estate speculators return to the real estate market in a feeding frenzy, causing prices to recover and signaling to end-user homebuyers that the water is fine.
Today’s sales volume, tomorrow’s pricing
As home sales volume has remained flat for the past three years, pricing has likewise leveled to bring adjustment to prices without the volatile moves of the past several recessions. For example, home price movement from November 2024 to November 2025 averaged across Los Angeles, San Diego and San Francisco has seen prices:
- a slight 0.7% lower in the low tier;
- level in the mid tier; and
- a minor 0.8% higher in the high tier.
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In 2026, watch for home sales volume to remain flat or further decline, as the likely trend of another plaintive spring season results from buyer caution around increasingly degraded employment conditions. But changes are underway.
The U.S. is quickly shifting into an economy not unlike the late 1930s, mid-1960s or mid-1980s stemming from a heightened focus to fast-expand the military-industrial complex. This type of spending suppresses user turnover in real estate, a state of rigor mortis for transactions.
While the condition has not yet arrived, when home prices slide into a decline across all pricing tiers, recent homebuyers with little down payment can only watch as the thin amount of equity in their homes slip underwater. We are not at this point, and may not get more than a modest 10 to 15% price adjustment over the next three years to match up with the past years of wage increases.
The negative equity pricing-to-mortgage crossover event does not begin until a nationwide economic recession brings on a further drop in the number of Californians employed. Also, keep an eye on the slow upward trend currently underway with mortgage foreclosures, a force which compels jobless owners to sell.
Eventually, transaction fees will pick up as real estate agents shift to assist the return of speculators after prices drop, then weather the resulting “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 as prices bottom during that period. What follows is a sustainable sales volume and pricing recovery with the return of end user homebuyers — and temporarily lower mortgage rates.
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