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California home sales and prices are projected to increase as buyers and sellers return to the market, enticed by lower interest rates and better housing supply conditions. California's median home price is forecast to climb 4.6 percent to $909,400 in 2025, following a projected 6.8 percent increase to $869,500 in 2024 from 2023's $814,000. A more favorable interest rate environment that will loosen up the "lock-in" effect and improve housing inventory will encourage buyers and sellers to return to the market to boost both home sales and prices next year, according to a housing and economic forecast by the California Association of Realtors. The California median home price is forecast to rise 4.6 percent to $909,400 in 2025, following a projected 6.8 percent increase to $869,500 in 2024 from $814,000 in 2023. A persistent housing shortage and a competitive housing market will continue to put upward pressure on home prices next year. "An increase in homes for sale, along with lower borrowing costs, is expected to entice more buyers and sellers to enter the market in 2025," said C.A.R. President Melanie Barker, a Yosemite REALTOR®. "Demand will grow as we start the year with the lowest interest rates in more than two years, particularly for first-time buyers. Meanwhile, would-be home sellers, held back by the "lock- in effect," will have more f lexibility to pursue a home that better suits their needs as mortgage rates continue to decline." Housing supply conditions will continue to improve next year, but a moderate increase rather than a surge in active listings should be expected in 2025. In the next 18 months, interest rates will decline, the lock-in effect will loosen up further, and more properties will be released onto the market. Homeowners who have delayed moving and investors who have been waiting for a market bounce-back will put their properties up on the market as they see the rising trend in home prices as an opportunity to sell. While supply in 2025 will remain below the norm by historical standards, active listings will increase slightly above 10% as market conditions and lending environment continue to improve. "Although inventory is expected to loosen as rates ease, demand will also increase with lower mortgage rates and limited housing supply, which will push home prices higher next year," said C.A.R. Senior Vice President and Chief Economist Jordan Levine. "Price growth is expected to be slower, but the housing shortage will keep the market competitive outside of big economic shocks, so prices will still rise. Assuming a healthy economy in 2025 that slows but doesn't shrink, home prices should rise modestly across California, with the state's median price climbing 4.6 percent to reach $909,400 in 2025." (Source: California Association of Realtors) Solera Recent Home Sales (Sept. 9 to Oct. 9, 2024) 1708 Sarazen 1392 sf 985 Blackhawk 1392 sf 1780 Las Colinas 1687 sf 1592 Castle Pines 2127 sf Based on information from CRMLS as of 10/10/24. Data has not been veried by broker or MLS. Properties may or may not be listed by the agent presenting the information. | LIFE IN SOLERA | NOVEMBER 2024 | 9 REAL ESTATE REPORT California 2025 Housing Market Forecast By Diana Mangan, Realtor and Resident CALIFORNIA ASSOCIATION OF REALTORS

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