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This is a look back at how the Southern California market stood as 2024 wrapped up, and it is worth reading with that date in mind. There was one question I kept hearing from buyers, sellers, and homeowners across Westlake Village, Thousand Oaks, Calabasas, and throughout the Conejo Valley: what is really happening out there? Here is how I read the data at the time and what I expected heading into 2025.
Key Takeaways
- By late 2024, mortgage rates in the mid-5% range were available, well off the 7.5% to 8% peaks seen not long before.
- The Southern California market showed longer days on market and more price reductions than in the pandemic years.
- Spring 2025 appreciation was projected in the 3% to 6% range, a far cry from the 20% to 30% jumps of 2020.
- Insurance availability was tightening, and more Southern California homeowners may need to rely on the state's FAIR Plan.
- Buying conditions through late 2024 represented the most opportune market for buyers in recent years.
The Southern California real estate market has shifted from a seller's market to a more stabilized, normal market as of late 2024. Rates in the mid-5% range were available, down from peaks of 7.5% to 8%, while days on market increased and price reductions became more common. Spring 2025 appreciation was projected at 3% to 6%.
Was It Really a Buyer's Market in Late 2024?
The short answer: we were in what I'd call a more stabilized, normal market. We were definitely not in that "name your price" seller's market we saw during and even before the pandemic, when multiple offers were the norm across the board in areas like Agoura Hills, Oak Park, and Newbury Park.
As of late 2024, buyer uncertainty had created a clear shift. When consumer sentiment drops, buyers pause their home search, and the data showed it: days on market were up, price reductions were more common, and homes simply weren't moving at the pace they had a couple of years earlier.
That shift also created real openings for buyers who were ready to act. More inventory and longer market times meant more negotiating power and more time to make a thoughtful decision.
What Happened with Interest Rates in 2024?
The encouraging news in late 2024 was that rates had dropped meaningfully from their recent peaks. I was buying a home myself at the time and locked a rate in the mid-5% range. With rates having touched 7.5% to 8% not long before, that was a real improvement in affordability.
However, there was an interesting disconnect happening at the time. Despite those rate improvements, the market hadn't fully adjusted yet. Even as rates continued dropping over the following weeks, the market moved sideways or even declined slightly. The buyer response to those better rates simply hadn't materialized as quickly as many expected.
What Did I Expect from the Spring 2025 Market?
Looking ahead to 2025 from that vantage point, I anticipated some meaningful shifts. First, we had to get through the typically slower holiday season, when inventory stays soft and buyers hold more leverage in negotiations.
Late January and early February is when the market traditionally opens up and builds momentum into spring. 2024 was unusual in that we never really got a traditional spring selling season. I expected 2025 would be different.
Realistic expectations mattered, though. We weren't going to see the explosive growth of 2020, with its 20% to 30% price increases. I projected steadier appreciation in the 3% to 6% range. That is a healthier market: buyers still have openings in the right situations, and sellers who price competitively and market well can still do fine.
How Are Political and Economic Factors Affecting the Market?
Consumer confidence plays a huge role in real estate decisions. If political tensions softened and some geopolitical issues stabilized, I expected consumer sentiment would improve heading into 2025 and 2026. When people feel more secure about the future, they're more likely to make major financial commitments like buying or selling homes.
The takeaway: successful transactions, buying or selling, increasingly depend on a well-thought-out plan rather than riding market momentum.
What About Insurance Challenges in Southern California?
One of the biggest challenges in Southern California deserves a mention: insurance costs and availability. The insurance professionals I talk with did not expect the situation to improve anytime soon, and the trend pointed toward more homeowners needing to rely on the state's FAIR Plan. Your own situation will depend on the property and the carrier, so talk to an insurance broker before you count on a quote.
Stack that on top of HOA fees, property taxes, and the general cost of ownership, and insurance adds another layer of affordability pressure for buyers already stretching in markets like Encino, Sherman Oaks, and Simi Valley.
Was It a Time to Buy or Sell?
My honest assessment at the time: as we closed out 2024, buyers had the best conditions they'd seen in years. More inventory, longer market times, and improved rates added up to genuine value for prepared buyers.
I also believed that window would narrow around late January 2025. As new inventory came to market and rates potentially improved further, I expected buyers to come back into the marketplace and competition to pick up.
For 2025 overall, I expected a busy spring, though not the "gangbusters" activity of recent years: a more balanced market where both buyers and sellers could find opportunities with the right approach. If you want somewhere pleasant to think it over, the trails at Wildwood Regional Park or a table at The Stonehaus both work. The plan itself is the part that matters.
Where Does This Leave You?
Market trends are useful context, but what matters is how conditions apply to your situation at the moment you are deciding. A lot has changed since late 2024, so treat the numbers above as a snapshot rather than current advice. Buying in Westlake Village, selling in Thousand Oaks, or weighing options elsewhere in the Conejo Valley each calls for its own plan. (And if you need a break from the spreadsheets, the Conejo Valley Botanic Garden and The Promenade at Westlake are both good places to clear your head.)
I work through these decisions with clients every day, here in Southern California and, through referral partners, elsewhere in the country. If any of this applies to you, I'm happy to talk through how the market looks right now and what it means for your situation. You can reach me at davisbartels.com.
