Southern California homebuying remains below Great Recession’s crash

How sluggish has Southern California homebuying been over the past three years?

Well, house hunters across the six counties bought 500,159 homes from 2023 through 2025, according to Attom.

And in the previous TWO years? 502,140 sold. Yes, roughly equal.

Call it what you want – chill, collapse, correction or crash – but house hunters are balking at high housing costs to an almost unfathomable degree. Ponder what Attom’s sales data, which goes back to 2005, tells my trusty spreadsheet.

In Southern California last year, there were 168,719 completed sales of houses and condos, both existing and newly constructed. That’s the second slowest year in this 21-year record, not much higher than the historic low of 162,513 set in 2023.

Contemplate that 2025 was the third-straight year in which Southern California homebuying was slower than the 198,863 sales in 2007, when that era’s housing bubble was crashing into the Great Recession.

Or look at the mess this way: While last year’s sales were roughly flat compared with 2024, they were 29% below the average pace dating to 2005.

The “why” is simple. Local homes are ridiculously unaffordable – especially when rents seem much cheaper with many landlords offering discounts.

And you can add to that rising economic uncertainty and a weak job market with stingy raises. Then there’s California consumer confidence, which is at a five-year low.

Very few things scream to a house hunter, “buy now!”

Prices must fall

The lack of buyers should have sunk home prices.

Instead, many potential sellers who don’t want to offer discounts are choosing to stay put. So sales, not prices, collapsed.

Look at the median sales price across the six counties. For December, it was $800,000 – unchanged from a year earlier and only 4% below the record $831,000 set in June 2025.

It’s a similar story across the counties, comparing December pricing to the all-time highs set over the past two years – ranked by the drop.

—Ventura’s $838,250 median was just 6% below its June 2025 peak.

—Los Angeles, at $875,000, is 5% below June 2025’s high.

—Orange at $1.15 million is 5% off June 2025’s pinnacle.

—San Diego’s $865,500 is down 5% from June 2024’s record.

—San Bernardino at $528,125 is 4% below October 2024’s peak.

—Riverside at $592,000 is 3% off April 2025’s top.

Curiously, what’s essentially flat local pricing came as homebuyers had far more choices in 2025. That may have created what some gurus call a “buyer’s market” for Southern California.

Consider that existing home listings across six counties jumped 34% from 2024, according to Realtor.com.

Industry insiders note, however, that this supply measure remains 14% below the pre-pandemic 2019 level. That dip may be providing some support for current pricing.

The gap in homes for sale between 2025 and 2019 isn’t uniform across counties.

It ranges from a supply down 1% in six years in Los Angeles to off 8% in Riverside, to 15% below in San Bernardino, to 20% below in San Diego and Ventura, to 40% below in Orange.

And don’t underestimate how investors prop up prices. This group — from individuals with a few properties to institutions with thousands — owns roughly one in six local houses.

Noteworthy dip

Even falling mortgage rates failed to create much of a buying mood in 2025.

The average 30-year home loan averaged 6.2% in the three months ending in December, according to Freddie Mac. That’s the lowest rate since October 2022.

One culprit in this homebuying drama is the Federal Reserve’s zigzagging policies – cutting rates to record lows in 2020-21, and then reversing course with hikes in 2022-24, and back to cuts in late 2025.

Last year’s Fed actions helped create a noteworthy dip in the number that really matters to house hunters – the monthly payment.

A typical Southern California buyer in December would have a monthly payment of $3,931 – assuming current rates and a 20% down payment. That’s down 4% in a year and 9% below the $4,330 peak of June 2025.

By the way, that monthly cost doesn’t include property taxes, home insurance, association fees or maintenance expenses.

Think about a simple affordability yardstick. This house payment metric is up 96% over six years, while Southern California wages, by one measure, rose only 32% in the same period.

Plus, don’t forget another monetary hurdle: a down payment of $160,000 as part of December’s estimated median price. Who’s got that kind of cash – or a rich, loving relative?

Among the six counties, San Diego buyers have experienced the largest decline in estimated house payments compared with recent peaks. Its $4,253 payment is 13% below the record high.

Ventura’s $4,119 payment is 12% off its high. Orange County’s $5,651 payment is down 11%. Riverside’s $2,909 payment is off 10%. Los Angeles’s $4,299 payment is down 10%. And San Bernardino’s $2,595 payment is off 8%.

Or consider the California Association of Realtors’ affordability index. It says an average 17% of state households could qualify to buy a house last year, up a smidge from 2024’s 16% – but far below the 29% average since 2005.

Not just here

The reluctance to buy a home is not some local quirk.

California’s 323,585 sales in 2025 were the state’s second-lowest since 2005. That was down 0.2% from the prior year and 27% below average.

Again, it’s about lofty pricing. The statewide $710,000 median price for December was down 2% from 2024 and was only 5% below the $751,000 peak in June 2025.

Nationwide homebuying fared slightly better, with 4.12 million sales, up 0.2% year over year and only 6% below average.

Curiously, Americans will still pay up. December’s $372,000 U.S. median was a record high, following a 5% increase in 2025.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com