Laura Beck
Sep 24, 2024
“California’s housing market demand will take time to recover, but recovery is happening, albeit slower than usual,” said Anthony DeLuca, an expert contributor at RetireGuide.
California’s housing market is experiencing a potential downturn after years of surging prices, with some areas bracing for significant drops. While population growth resumed in 2023, the state is still grappling with the fallout of strict COVID policies and high living costs, which are slowing its housing recovery. As Anthony DeLuca, a contributor at RetireGuide, explained, “California’s housing market demand will take time to recover, but recovery is happening, albeit slower than usual.”
Here’s a breakdown of which areas are seeing the most dramatic shifts:
San Diego
Once a red-hot market, San Diego is now cooling off significantly:
9% decrease in home values
23% increase in newly listed homes
80% surge in inventory
This indicates that buyers could find bargains by 2025, while homeowners may face challenges.
Willits
Located in Mendocino County, Willits has seen home values drop by 10.01%, according to DeLuca. This trend suggests prices could continue to fall sharply into 2025.
Ukiah
Also in Mendocino County, Ukiah has seen a 6.52% decrease in home values. DeLuca suggests that buyers could find great deals here next year.
Clearlake
In Lake County, Clearlake’s home values have dipped by 5.62%, making it another potential spot for buyers seeking bargains by 2025.
West Hollywood
Even West Hollywood in Los Angeles County is feeling the effects, with a 3.25% decrease in home values. The potential for further drops could make this an opportunity for those looking for discounted property in a normally high-priced area.
The Broader Market Trends
New Construction: California aims to build 2.5 million new homes by 2030, which could further drive down prices in some areas.
Slow Growth: SiliconValley.com predicts only a 4.6% home price increase through April 2025, well below previous growth rates.
Northern California Struggles: Areas in Northern California, particularly those impacted by coastal fog, seem to be experiencing the biggest downturns.
While these declines may be welcome news for buyers, current homeowners could face challenges as the market adjusts. The overall outlook remains uncertain, but those keeping an eye on these regions might find significant opportunities in the near future.