Current home sales

In March 2025, California saw 22,783 escrows close for new and resale home transactions. March home sales volume fell 21% from the prior month, a bit of a surprise as the annual sales cycle peaks in June most years. March 2025 sales volume stagnated at 1.3% over the same month one year earlier.

Importantly for trends, year-to-date (YTD) sales volume through March 2025 held steady and did not change from a year ago. Compared to 2019 — the last normal year before the economic tsunami of the 2020 pandemic — 2025 sales volume YTD is 20% lower. A real estate recession by most standards, the pandemic years being a period of anomalies.

Recent home sales trends

Consider that annual home sales experienced a 6% increase from 2023 to 2024. More critically, sales volume in 2024 was 27% below 2019 — the last past year in a typical sales cycle. 

Understand that the homebuyers available for 2023 and 2024 were cannibalized by the preceding pandemic-driven buying spree. Be aware your buyer today knows their math for income-to-mortgage leveraging, thanks to readily available insight. In turn, buyers are less inclined to acquire property until sellers adjust prices downward to match reduced buyer borrowing capacity brought on by high mortgage rates, a future trend.

The developing public uncertainty about political upheaval, tariffs and insurance damps down owner and tenant turnover, and thus sales volume. Helpfully, wages have kept pace with the pandemic inflation bump. Sellers need awareness of “taxation” by significant interest and insurance rate increases which offset pay increase advantages for homebuyers needing mortgage funds.

Today’s sales volume strikes at pricing

Watch for home sales volume to trail off by the end of 2025, before and after what looks like an approaching lackluster annual spring bounce in sales numbers. But the LA fire destruction will alter LA county numbers for maybe a couple of years. Without the support from a rush of uninhibited homebuyers, home prices do decline. However, clarity among agents about buyer representation will lift buyer comfort levels and sales volume.

Until home prices decline across all pricing tiers, not just the high tier as is developing, recent homebuyers with little down payment can only watch as the equity in their home slides underwater. This pricing-to-mortgage crossover event did not occur in 2024. This crossover into negative equity is not likely to begin until a nationwide economic recession sets in bringing on a drop in employment. Keep an eye on the slow long-term upward trend from very low rates of mortgage foreclosures as a force compelling further owners to sell.

Expect a return of real estate speculators as the current real estate recession eventually produces a “dead cat” bounce in both sales volume and pricing. Within 12 months following the speculator-driven market bounce, home prices historically slip, then bottom within a 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.

Updated April 2025.

Chart 1

Chart update 4/24/25

	March 2025	March 2024	YoY change
California home sales volume	22,783	22,486	+1.3%

Home sales fluctuate from month to month for a variety of reasons. The most significant reason is the volatility of homebuyer demand. Several factors constantly move California’s homebuying market, including:

• seasonal motivational differences, an annual cycle [see Chart 2];
• job market fluctuation;
• mortgage interest rate movement;
• home pricing sought by sellers;
• investor and speculator opportunity perceptions;
• negative equity property financials;
• turnover rates for tenants and owners; and
• homebuyer saving rates.

Seasonal differences in annual sales volume

It’s normal for home sales volume to rise in the first half of the year and fall after peaking around June.

Chart 2

Chart 2 shows average home sales volume experienced from 2011-2018, a recovery period. As depicted, the most homes sold monthly during a year close escrow in June. Another upturn takes place in December, as homebuyers seek to wrap up their financial activities before the end of the year.

Real estate professionals need not fuss when they hear of month-to-month falling sales volume in the latter half of the year. It is a normal seasonal progression taking place. What to watch for is year-over sales, to compare one month this year to the same month last year or compare another period such as year-to-date to see a trend.

The recurring recovery for home sales volume

Annual real estate sales numbers since the Great Recession of 2008 were characterized as a bumpy plateau in home sales volume. This period ended in 2020 with the Covid pandemic.

As a rule, current market activity, whether up or down, is reflected first in sales volume, followed in nine to 12 months by same-direction price adjustments.

Chart 3

Chart update 4/24/25

	2024	2023	Annual change
Annual home sales volume	274,552	260,189	+5.5%

To set the stage for a forward look, a review of sales volume in the recent past is helpful:

• Mid-2005 saw sales volume peak for all types of real estate in California, with nearly 754,000 homes sold that year;
• sales bottomed in 2008 and were artificially inflated in 2009 due to subsidy-induced purchases and speculators prematurely jumping on that momentum, but remained 40% below 2005;
• 2011 increased slightly in sales volume while decreasing in sales prices, a normal price adjustment condition;
• 2013 home sales volume stagnated while home prices increased rapidly some 30+%, not a good set of signs for the immediate future; and
• 2018 saw sales volume decrease rapidly in the fourth quarter, ending the year 4% below 2017;
• 2019 home sales volume decreased slightly from the prior year;
• 2022 home sales volume peaked early in March and lost all ground gained in the pandemic year of 2021, ending the year 24% below 2021, but only 12% below 2019, the last “normal” year for home sales before the pandemic upended market dynamics;
• 2023 home sales lost a further 22% over the prior year, further wiping out the ground gained in 2021; and
• 2024 home sales have stabilized from the prior year, with a slight downward trend. This will likely remain the trend in 2025.

Chart 4

Chart update 4/24/25

	March 2025	March 2024	March 2023
Home sales volume year-to-date	58,210	57,435	56,120

Year-to-date (YTD) home sales volume in 2025 rose slightly compared to a year prior. As of March 2025, YTD home sales volume is 1.3% above a year earlier. Compared to 2019 (the last “normal” year for housing before the Pandemic Economy took over), home sales volume YTD is 20% lower in 2025 as of March.

Home sales volume remains steady rising slightly in 2025, due to:

• high mortgage rates lowering homeowner turnover;

• a greater percentage of all-cash buyers undeterred by interest rates;

• home inventory across the state increasing slowly; and

• the post 2022 shadow real estate recession, yet to be declared, but well underway throughout our real estate markets.

Home sales in the coming years

The forward trend in California home sales is one of caution and delay for both buyers and sellers. Homebuyer income is growing but only keeping up with inflation, better than the pace during the decade before the pandemic.

The increased borrowing capacity brought on by ever lower mortgage rates ended in 2013, the beginning of a decades long rise in mortgage rates, However, the historic low mortgage rates of 2013 were temporarily matched in 2020 through 2021.

firsttuesday forecasts annual home sales volume will not remain the same in the 2025-2026 period, similar to 2024, and that slipping will accelerate. The decline is the result of more costly construction and lack of lower FRM rates as increasingly frustrated buyers become unwilling to take on debt leveraged ownership.

Relocating Baby Boomers going into retirement in the coming years will be the primary propelling force by both selling homes and buying replacements. Boomers tend to buy a replacement home when they sell. The Millennial (Generation Y) age group will add to the sales volume only when jobs at better pay levels are plentiful, a necessity permitting them to borrow and become first-time homebuyers.

Trends to be concerned about

Many long-term market conditions restrain the rise of home sales volume:

1. the weakest homebuyer demographics in decades;
2. failed savings for a down payment as high rents squeeze potential first-time homebuyers from saving, even though personal income since 2016 has risen at a pace slightly above the rate of consumer inflation for the period;
3. buyer borrowing power no longer enlarging the amount of funds they can borrow as interest rates have trended higher since 2013, the pandemic period an exception, reducing funding for purchase-assist financing and dampening ownership until property prices drop;
4. the public’s increasingly anti-business and pessimistic attitude about American economics, wealth inequality and national politics no matter election outcomes; and
5. tightened mortgage standards as lenders are forced to apply forgotten fundamentals of sound mortgage lending practices (20% down payment on non-FHA/private mortgage insured loans, lower income ratios, risk-free credit scores and full documentation of income, funds and collateral value).

The competitive broker

What’s a broker to do until home sales volume takes off?

SFR brokers and agents might consider adding SFR-related services to supplement their income. Those who do add related services will restructure their practice as “all-service brokers.” Transaction-related services will be integrated into their office operations to maintain solvency and growth.

Related article:

Stay ahead of the next recession

These services include:

• escrowing their in-house transactions under the broker’s license;
• entering into or expanding property management services;
• negotiating equity purchases for investors from underwater owners on the chance of a short sale discount or who have a positive equity;
• specializing in sales and leasing of a particular type of commercial property, other branch office locations and alternative marketing approaches (aside from social media);
• providing mortgage loan broker services for business-investor loans made by private lenders and secured by the borrower’s residence (no mortgage loan origination (MLO) endorsement required);
• arranging carryback financing and the takeover/assumption of existing mortgages, and buying and selling those carryback trust deed notes;
• negotiating options to buy, or lease with option to buy when inventories expand whether driven by mortgage defaults or a shadow inventory acquired by speculators to be flipped;
• exchanging investment properties with equity to help owners relocate their wealth held in real estate tax-free; or
• using barter credits (crypto) in lieu of greenbacks, etc.

Buyer brokers are mandated to commit to exclusive representations with buyer-clients for all types of property. This buyer-agent agreement is designed to make assisting a buyer more comfortable for the client. Representation agreements answer unasked questions and result in agent-to-client bonding not capable before 2025 due to the price-fixing regime.

Buyers, on entering into an exclusive right-to-buy buyer representation agreement, also known as a BRA, commit to employ a broker and their agent. This representation is the obverse side of the same employment sellers commit to when employing a broker and their agent.

The representation agreement clarifies the buyer broker is assured time spent aggressively assisting a buyer produces a closing and a fee when property is available in the market.

Causes for the rise and fall The trend in California home sales during the initial years of the 2010s remains grim for sellers. Not so for buyers. Homebuyers’ dollars are going further than anytime during the past 15 years. Sales now and into 2014 will remain excessively lender-driven and speculator-riddled, but will be easily predictable for SFR agents and their brokers. The center of this action is the multiple listing service (MLS). To set the stage for a forward look, a review of sales volume in the recent past is needed: Mid-2005 saw sales volume peak for all types of real estate in California; Early 2006 produced both the peak in sales prices and the initial precipitous decline in sales volume. Nearly 30% fewer sales were recorded in 2006 than in 2005; In 2007 sales volume dropped another 30%; 2009 sales were artificially higher than anticipated due to subsidy-induced purchases and speculators, but remained 40% below the 2005 peak year; 2010 saw a decline from the year earlier in both sales volume and prices; 2011 increased slightly in sales volume while decreasing in sales prices; and 2012 saw sales volume and home prices increase marginally, supported primarily by massive speculation. Related articles: California tiered home pricing Budging from sticky pricing (or not). Real estate owned property (REO) resales and speculators have contributed to sales volume oddities over the past few years. Conventional positive equity sales remain the exception. Lenders have turned increasingly to short sales in 2012, surpassing the number of foreclosures in California. Short sales will continue to make up roughly one-fourth of the home resale market in 2013. Going into 2013, sales volume is gradually recovering as speculators begin to exit the market, making room for buyer-occupants. The bounce loses energy and hunts for the floor Sales volume will likely increase by 10% in 2013, due to slowly improving confidence and job numbers. Anticipate modest price increases to follow in 2014, falling back in 2016. In 2015, the Federal Reserve (the Fed) will need to raise short-term interest rates in order to keep a lid on the recovery (as they did in both 1984 and 1994). Expect the short-term rate to decline within one year, the 2016 period, at the end of a downward turn in real estate sales volume. Sales volume’s next big peak will occur in 2019-2020, with pricing following 12 months later. Related article: Suspect behavior: why and how the Fed creates a recession The real estate market is now settling into a long recovery. For home sales volume to achieve the kind of dramatic but stable recovery which took place in the 1996 period following the 1990s real estate recession, employment will need to increase at the rates experienced in the mid-1990s: 350,000+ additional jobs created annually for three years. California’s labor force is inching back to that number, as a total of 700,400 jobs have been gained since employment was at its lowest in January 2010. However, as of October 2012, California is still 900,000 jobs short of the employment level before the Great Recession. Once Californians feel the effects of two or three years of healthy employment growth, their confidence about the future will improve. They will once again be willing to invest in the economy. Only then will end users return in sufficient numbers for sales volume to swell. Related article: Homebuyers feel ready and willing to buy, but not financially able In 2017, sales volume will begin to pick up significantly, peaking in 2019-2020. Employment will have reached its 2007 peak, and will continue to grow quickly. 2017 will see home prices jump well beyond the rate of consumer inflation.Mortgage lenders with an eye for profits will then begin to loosen their lending standards to whatever extent federal regulators permit. The memory of the grim mid-2000s will be quickly pushed aside, and mistakes will be repeated. Factors leading to recovery Beginning in 2016-2017, another wave of investors and an upsurge of household formations by first-time homebuyers, will kick-start sales volume. In turn, this will drive pricing momentum upward once again. Keep your eyes on homebuyer demand (not sellers, median prices or the MLS inventory). Real demand is driven by: age demographics; interest rates; tax credits; new jobs; and rising real estate prices. Related article: It’s the demand, stupid! Favorable market conditions now at work Many favorable market factors are currently support increasing sales volume: a slow (but steady) increase in the number of new jobs; direct lender subsidies from the federal government for loan modifications on upside-down mortgages; much lower high-tier home prices (as well as more price declines in low- and mid-tier homes), stabilizing in 2013; no major increase in new housing starts into 2014 beyond 10-12% annually; increased short sales; slowly rising consumer confidence and spending; and the recapitalization of the private mortgage insurers to eventually replace government guarantees of home mortgages. Trends to be concerned about However, many unfavorable market conditions restrain the rise of home sales volume: deflationary pressure on consumer and real estate prices (labor, materials and the price of land have become less expensive); the high level of underwater homeowners in California, who will not collectively reach solvency until 2025; the weakest homebuyer demographics in 15 years; the public’s increasingly anti-business and pessimistic attitude about American economics; and tightened loan standards as lenders are forced to apply the forgotten fundamentals of sound mortgage lending practices (20% down payment on all non-FHA loans, lower income ratios, risk-free credit scores and full documentation of income and funds). The competitive broker What’s a broker to do until home sales volume takes off? SFR brokers and agents can consider adding SFR-related services to supplement their income. Those that do add related services will restructure their practice as all-service brokers. Transaction-related services will be integrated into their office operations to remain solvent and grow. These services include: escrowing their in-house transactions under the broker’s license; entering into or expanding property management services; inspecting vacant homes and issuing broker price opinions (BPOs) for REO lenders as foreclosures increase around 2016; negotiating equity purchases for investors from sellers-in-foreclosure who have a positive equity or the chance of a short sale discount; specializing in sales and leasing of a particular type of commercial property, other branch locations and alternative marketing approaches; providing mortgage loan broker services for business-investor loans made by private lenders (no mortgage loan origination (MLO) endorsement required); arranging carryback financing and loan assumptions, and buying and selling those carrybacks; negotiating options to buy; exchanging properties with equities to help owners relocate their wealth held in real estate; or using barter credits in lieu of greenbacks, etc. Brokers can also insist that prospective buyers commit to exclusive representations by a broker and agent to locate a home (or other property). By signing an exclusive right-to-buy listing agreement, buyers are asked to employ brokers and agents just as sellers are asked to employ listing agents. This will ensure time spent with a buyer produces a closing and a fee.