Los Angeles Housing Market Faces Stagnation with Lowest Turnover in 30 Years

Los Angeles Home Sales Plummet to Historical Lows in 2025

The Los Angeles housing market is experiencing a significant slowdown, with turnover rates hitting a 30-year low. According to a report from Redfin, fewer than 15 homes per 1,000 are selling in 2025. The stagnation is largely attributed to high mortgage rates, which are currently between 6.5-7.5%, making affordability a critical issue. This lack of mobility is exacerbating the city's ongoing affordability crisis, deterring both potential buyers and sellers who are wary of entering a market with high financial barriers and low liquidity.

Home sales drop to 15 per 1,000 in 2025.

Current Market Trends: Stable Prices Amid Low Inventory

Despite the low turnover, median home prices in Los Angeles County remain stable, staying just above $850,000 as per the Borges Real Estate Team. The market has shifted from a seller's paradise to a more balanced situation, partly because of high mortgage rates that temper rapid price increases. Inventory remains a concern, with levels 30-40% below historical averages, which continues to pressure price stability, despite the moderated price appreciation of 4-6% annually.

Regional Variations and Market Projections

The Los Angeles-Long Beach-Anaheim area saw its average home value rise by just 1.1% to $972,837 in October 2025, according to Norada Real Estate. This modest increase is reflective of the broader trend of slowing growth in the region. Interestingly, the California Association of Realtors noted a 10.6% year-over-year increase in home sales in the Los Angeles Metro Area for September 2025, suggesting pockets of resilience amid the general slowdown. The NAR predicts a national rise in existing home sales by 6% in 2025 and 11% in 2026, though Los Angeles might see only marginal growth due to local economic constraints.

Impact on Buyers and Sellers: Increased Evaluation Time

Buyers now have more leverage and time for decision-making, with homes spending an average of 30-45 days on the market, as noted by the Angela Bond Group. This shift allows potential buyers to be more selective, although higher mortgage rates continue to be a hurdle. Sellers, on the other hand, are facing challenges pricing their homes competitively. The sales-price-to-list-price ratio has shifted towards 98-99%, highlighting a need for realistic pricing strategies in the current climate.

Expert Insights: Market Not Dying, Just Stabilizing

Contrary to alarming narratives, experts like those from JDJ Consulting argue that the Los Angeles market is not dying but stabilizing. According to JDJ Consulting Group, the slight decrease in home values is a sign of market correction rather than collapse. They point out that nearly half the homes sell below asking prices, indicating a softening demand that can offer strategic opportunities for investors and first-time buyers who can navigate the high interest rate environment.

Future Implications: Navigating High Mortgage Rates

Looking forward, the key challenge for the Los Angeles market will be navigating the high mortgage rate environment. Investors and homebuyers are advised to consider long-term strategies, such as targeting lower-priced properties or leveraging alternative financing options. California Association of Realtors' projections for a 3.6% rise in median home prices by 2026 suggest a gradual recovery, but with significant regional disparities. This makes comprehensive local market analysis crucial for successful investments.

Key Recommendations for Investors

• Focus on neighborhoods with historically stable pricing and low vacancy rates.
• Consider diversifying portfolios with smaller single-family homes, which are showing slight price dips.
• Evaluate financing options that offer fixed rates to mitigate future interest rate hikes.
• Stay informed of policy changes affecting real estate taxes and housing incentives.