Why this matters: Real estate agents and brokers are observing a faltering spring sales bounce and seeing the results of declining buyer purchasing power. High mortgage rates and buyer caution due to political upheaval, trade taxes and out-of-state attacks on immigration are pushing buyers to stay away until attracted by a significant drop in asking prices.

California Home Pricing Tiers examined

During May 2025, home prices decreased compared to the prior month in Los Angeles, San Francisco and San Diego.

While most price tiers fell back across the state, the low- and high-tiers in San Diego remained flat from April to May.

However, current home prices in San Diego and Los Angeles are now higher than their previous peaks during May 2022. In San Diego, the overall growth from May 2022 until April 2025 increased 4.7% while Los Angeles prices are 6.1% higher. Again, not close to the rate of consumer inflation and increases in wages and salaries.

In contrast, San Francisco’s tiers have receded after spiking in May 2022, sinking 7.7% as of May 2025. Be aware: the direction of pricing in the most expensive homes sets the forward trend for all home pricing. Expensive homes are first to rise in price from a recession and first to drop in price after the peak of a recovery, as is presently underway.

After the lackluster spring 2025 seasonal “bounce,” a growing for-sale inventory further presses pricing down.  

Buyers are sitting out and waiting to sense the decline in pricing is over when prices bottom and begin to rise. Meanwhile, real estate agents need to consider a switch in their services to maintain their standard of living.

The focus has turned, in part, to cash buyers willing to purchase when mortgage rates stay high, inventories rise and the pace of tenant and homeowner turnover slows. Consider diversifying your services to hedge against uncertain transitions in the economy. Brokers need to consider offering other services as providers, since brokers get the initial leads providers need by representing buyers and sellers.

Updated August 9, 2025.

Charts are updated monthly. There is a two-month lag in reported data.

high-endrolex.com

Chart update 08/09/25

Chart update 08/09/25

May 2025May 2024Annual ChangeMay 2022 past peakChange from 2022 peak
Low Tier516514+1%484+7%
Mid Tier441442-1%420+5%

High Tier

428425+1%414+3%

Chart update 08/09/25

Chart update 08/09/25

May 2025May 2024Annual ChangeMay 2022 past peakChange from the 2022 peak
Low Tier528516+2%500+7%
Mid Tier471462+2%438+7%

High Tier

416415+0%395+5%

Chart update 08/09/25

Chart update 08/09/25

May 2025May 2024Annual ChangeMay 2022 past peakChange from past peak
Low Tier391395-1%418-6%
Mid Tier381392-3%417-9%

High Tier

357354+1%384-7%

 

Chart update 08/09/25

Chart update 08/09/25

May 2025May 2024Annual ChangeMay 2022 past peakChange from past peak
Low Tier478475+1%468+3%
Mid Tier431432-0%426+1%

High Tier

400398+1%398+1%

Forecast by firsttuesday

The above charts track sales price fluctuations of single family residence (SFR) resales in California’s three largest cities. Each city’s sales prices are organized by price tier, giving a clearer picture of price movement in each price range within local markets.