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Housing Tracker: Southern California home values dip in September

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  Published in House and Home on Friday, November 7th 2025 at 6:15 GMT by Los Angeles Times
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A month‑to‑month slide amid broader market fatigue

The decline in September follows a steady upward trajectory that began in late 2023, when the median price in Southern California peaked at $820,000 in May 2024. Over the past 12 months, prices have risen by 12 %, still outpacing the national median but lagging behind the 15 % increase seen in the mid‑west and 18 % surge in the Pacific Northwest. The article attributes the September slowdown to a combination of factors: higher mortgage rates, rising construction costs, and a slight uptick in housing inventory.

Mortgage rates, which hovered around 5.6 % for a 30‑year fixed loan in September, have been creeping upward since the Federal Reserve’s last interest‑rate hike in July. While the rate increase is modest, it has had a tangible effect on affordability, especially for first‑time buyers. The Housing Tracker notes that the number of homes priced below $700,000 rose by 4.7 % in September, a 2.1 % jump from the previous month, indicating a shift in buyer behavior toward more affordable segments.

Regional disparities: Los Angeles vs. Orange vs. Inland

The article breaks down the market by county, revealing that Los Angeles County experienced the most pronounced dip. The median sale price there fell by 1.8 % to $730,400, down from $744,700 in August. In contrast, Orange County’s median price actually rose by 0.3 % to $798,100, reflecting a small but sustained demand for luxury properties in the San Juan Capistrano and Newport Beach areas.

San Diego County saw a 0.5 % decline to $785,200, while the Inland Empire, encompassing Riverside and San Bernardino counties, reported a 2.2 % drop to $675,800. The deeper decline in the Inland Empire is tied to a 10 % increase in inventory, according to the article, as more owners opt to sell after enjoying years of price appreciation.

Inventory and days on market

Inventory levels have climbed across the region, with a 3.2 % increase in active listings in September. The article cites the California Association of Realtors, which reported that the average inventory level in Southern California now sits at 2.1 months—up from 1.9 months in August. Higher inventory typically exerts downward pressure on prices, and the article notes that the average days on market increased from 22 to 26 days in September, a sign that sellers are facing stiffer competition.

Why the dip matters for sellers and buyers

For sellers, the article warns that the September dip could translate into longer negotiation periods and potentially lower offers, especially for properties priced above the new median. Agents quoted in the piece say that buyers are now more willing to negotiate on price, repairs, and closing costs. “We’ve seen more offers below the listing price than we have in the past year,” said a local realtor who chose to remain anonymous.

Buyers, on the other hand, may find a more favorable landscape. With the median price sliding below the $750,000 threshold, a growing number of buyers who previously hovered outside the market are now considering making an offer. The article points to the recent launch of a “Buyer’s Alert” email list by the Los Angeles County Recorder’s Office, which provides updates on newly listed homes in the under‑$700,000 segment. Additionally, the article notes that the average mortgage payment for a $700,000 home at a 5.6 % rate is $3,983 per month, down from $4,050 in August—a saving of $67 that could be crucial for buyers with tight budgets.

Data sources and further reading

The Housing Tracker’s analysis is based on multiple data streams. Primary sources include:

1. California Association of Realtors (CAR) – Monthly Market Report, which offers detailed metrics on median sale prices, inventory levels, and days on market by county.
2. Zillow Home Value Index – Provides trend data on home value changes, with a focus on the “Zestimate” methodology for property valuation.
3. Redfin Real Estate Data – Supplies supplemental data on listing activity, time on the market, and buyer activity.

The article includes hyperlinks to each of these sources. For instance, the CAR’s report can be accessed through the LA Times’ “California Housing Market” sidebar, offering downloadable PDFs and interactive charts. Similarly, Zillow’s Home Value Index is linked to an interactive map that allows readers to compare price trends across ZIP codes.

What analysts predict for the next quarter

Market experts featured in the article are cautiously optimistic about a rebound in the short term. The article cites a forecast from the California Real Estate Council, which projects a 1.5 % increase in median prices in January 2026, driven by a projected decline in mortgage rates back to 5.4 %. However, the same source warns that the recovery could be uneven, with coastal markets like Los Angeles and Orange County lagging behind inland regions.

The article also highlights a trend toward “smart” housing: a growing number of buyers are looking for homes with energy‑efficient appliances, solar panels, and smart‑home technology. A separate link within the article directs readers to a local news segment on the rise of sustainable homes in Southern California, underscoring how technological and environmental factors are reshaping buyer preferences.

Bottom line

While the September dip in Southern California home values is modest, it signals a shift in a market that has dominated the U.S. for years. Lower prices, increased inventory, and longer days on market are all pointing to a more balanced playing field for buyers and a potential recalibration for sellers. As interest rates and economic conditions continue to evolve, the market will likely remain in flux over the next few months, with Southern California’s diverse regions displaying varying degrees of resilience and vulnerability. The Housing Tracker will continue to monitor these changes, providing residents and investors with timely updates as the market adjusts to the new realities of affordability, supply, and demand.