Thinking about Buying or Selling a home in Los Angeles?  The current Los Angeles market is expirencing a bit of a shift.

While sales are a bit slower than last year, and prices have seen a slight dip in some areas, there are signs that the market could pick up as we move forward. It’s a situation where being informed is key, and I'm here to walk you through what the numbers are telling us, based on the latest reports.

Current Los Angeles Housing Market Trends in 2025:

Home Sales

Let's start with how many homes are actually changing hands. Across California, and specifically in the Los Angeles Metro Area, home sales in July were down compared to the same time last year. According to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), in California, existing single-family home sales were down 4.1 percent from July 2024.

For the Los Angeles housing market (Metro Area), the sales figure dipped by 1.0 percent compared to last year. This means that fewer homes are being sold now than they were a year ago. This trend has been going on for a few months now, making July the fourth month in a row where sales have been lower than the previous year.

It’s also worth noting that across the entire state, year-to-date home sales are down by 0.4 percent. This indicates a general slowdown in the market compared to the beginning of the year.

Home Prices

When it comes to home prices, the picture is a little more complex. Statewide, the median home price in July was $884,050. This is a small drop of 0.3 percent compared to July of last year. For the Los Angeles Metro Area, the median home price was $845,500, which is also down by 0.4 percent compared to last July.

This means that, on average, homes are selling for slightly less than they were a year ago. It's not a dramatic drop, but it's definitely a change from the steady increases we've seen in previous years.

Are Home Prices Dropping in Los Angeles?

So, are prices actually dropping? Yes, but it's important to understand what that means. The data shows a slight decrease in the median home price compared to last year, and even month-over-month. For example, California’s median home price declined for the third consecutive month, reaching a five-month low.

This cooling in prices is likely due to a few factors, including higher mortgage rates which we'll talk about more later, and a general sense of economic uncertainty that might be making some buyers a bit more cautious. However, as one expert mentioned, even with these recent dips, California’s median home price could still see a modest annual increase for the year if the market stabilizes. So, while prices aren't soaring like they might have been, they aren't in freefall either.

Housing Supply

What about the number of homes available for sale? This is where things get interesting. The unsold inventory index, which tells us how long it would take to sell all the homes currently on the market at the current sales pace, has actually gone up. In July, the statewide unsold inventory index was 3.7 months, up from 2.9 months in July 2024.

This means there are more homes sitting on the market for longer. In fact, total active listings were up a significant 37.7 percent from a year ago, reaching a 69-month high. This increase in supply is a key reason why we're seeing prices level off or slightly decrease. More homes available means buyers have more choices and aren't in as much of a rush to make offers, which can lead to less bidding wars and more negotiation power for buyers.

For the Los Angeles Metro Area specifically, the unsold inventory index was 3.9 months in July, up from 3.0 months in July 2024. This also indicates an increase in the number of homes available for buyers.

Is Los Angeles a Buyer's Housing Market in 2025?

Given the trends we've seen – slower sales, slightly softening prices, and increased inventory – it's leaning more towards a buyer's housing market right now, especially when compared to the frenzy of a few years ago.

In a seller's market, homes tend to sell very quickly, often with multiple offers above the asking price. In July, the statewide sales-price-to-list-price ratio was 98.5 percent, meaning homes were generally selling for just below the asking price. This is down from 100 percent in July 2024. It also took longer to sell a home, with the median time on market increasing to 28 days, up from 20 days in July 2024. For the Los Angeles Metro Area, the median time on market was 30 days, up from 22 days last year.

These numbers suggest that buyers have a bit more breathing room. They have more options, more time to consider their decisions, and more negotiation power than they did in recent years. However, it’s not a drastically buyer-dominated market, as prices haven’t plummeted, and some areas are still quite competitive.

Market Trends

The overall market trends point to a more balanced, though slower, real estate environment.

Here’s a quick look at some key trends:

• Slower Sales: Fewer homes are selling compared to last year, both statewide and in the Los Angeles area.
• Price Stabilization: While not seeing huge drops, prices have mostly leveled off or seen slight decreases year-over-year.
• Increased Inventory: More homes are available on the market, giving buyers more choices.
• Longer Selling Times: Homes are taking longer to sell, indicating a less intense market.
• Buyer Negotiation Power: Buyers have more room to negotiate on price and terms.

The Takeaway

The current Los Angeles housing market is in a period of adjustment. With mortgage rates influencing affordability and increased inventory giving buyers more options, the market is shifting away from the intense seller's advantage of recent years. It's becoming a more balanced market where buyers have a bit more power, and sellers need to be realistic about pricing and presentation.