What Will 2025 Bring For the Housing Market?

A Merry Christmas Santa

Predictions don't always work out, so in the meantime, please enjoy your December holidays, however you  celebrate them!

2025 will possibly bring:

California median home price of $909,000, a 4.6% upward growth in price.

Statewide higher sales volume than the previous 2 years at 304,000 (but that's 100,000 lower than 2016 sales).

A continued housing affordability index of only 16%, compared to 31% in 2016.

A 30-year fixed rate mortgage of 5.9% (watch for Fed's meetings December 17 and 18).

Insurance costs are still rising along with stock market volatility.

Housing inventory has been increasing (as seen in higher sales volume figure) so that means it may be easier to make a move than in the last 2 years. When sellers can sell, more buyers are able to enter the housing market.

Election outcomes? **If capital gains exemption (some Congressional efforts have been made in the last 2 sessions) is doubled as hoped, that will be another big step for many sellers to move forward. An increase from a $500,000 exemption to $1,000,000 will be a huge help for the California markets. **Will state and local income tax (SALT) deductions increase for California? **Will tax cuts and tariffs help or hinder inflation--because some economists suggest that tax cuts will hinder a decline in mortgage rates. **And, the controversy of deportations may also suggest that deporting immigrants with no documentation is not likely to affect the housing inventory crisis at all: it's actually the millennial generation which has driven the increase in numbers of new households, while only 4.8% of U.S. households have immigrants here illegally. Housing shortages are also a result of land cost, construction costs, and housing programs that need to  be fixed. Read the link at Stateline for more on this issue.

Home insurance will probably continue to rise for some owners, depending also on location. Owners with newer roofing and updated electrical (a problem in some property sales) will fare better with their insurance companies. Contact your insurance agent to find out what you can do to avoid a premium increase as much as possible, and visit the CA Department of Insurance website for more information.  This is important, because 31% of homebuyers in 2024 had problems obtaining home insurance on their new purchase, and a buyer cannot close escrow unless the lender sees proof of obtaining insurance.

Long Beach Market, November:

In November, a single family average price for the city was $1,183,570, an increase of +3.2%.

The average price for a condominium was $580,235. 

The average price for a duplex was $1,151,280, an increase of 0.8%. Living in one and renting out the other could be a great option for some buyers.

If you would like to know more about your property value, just contact me.

And have a Happy New Year!

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996