As we move into the second half of 2025, one thing’s clear: the real estate market isn’t what it was a few years ago. The pandemic-era frenzy has cooled, and what we’re seeing now—especially here in Los Angeles—is a market trying to find its balance.
Higher mortgage rates, more cautious buyers, and a steady rise in inventory are changing the landscape. And honestly, depending on your goals, that’s not a bad thing.
Like Nadia Evangelou from the National Association of Realtors said, “The housing market is at a turning point.” And from my day-to-day experience as a real estate agent here in L.A., she’s right. So, whether you’re buying, selling, or just keeping tabs on what’s happening, here’s my personal breakdown of what’s going on—and what it could mean for you.
FEWER SALES, BUT MORE OPPORTUNITIES
Sales activity is still slower than what we saw before the pandemic, but things are starting to pick up, especially as more homes hit the market and sellers adjust their pricing.
NAR’s Chief Economist Lawrence Yun made a great point recently: even with millions of jobs added to the economy, home sales have been stuck at about 75% of “normal” levels. The demand is still there—it’s just waiting for the right moment. If mortgage rates dip even slightly, we could see that demand come alive fast.
I’ve already started to notice more interest from serious buyers, especially those who understand that less competition gives them an edge.
My advice:
If you’re a buyer, now is a great time to shop with a cool head and take your time.
If you’re a seller, success today comes from understanding what buyers are willing to pay in this market, not clinging to prices from 2021.
Let’s talk through what the numbers are showing locally and map out a brilliant game plan.
MORTGAGE RATES: HIGHER, BUT STABLE
Right now, we’re looking at 30-year fixed rates just under 7%. Not ideal, but also not jumping wildly like we saw last year. According to Yun, rates could average around 6.4% in the second half of this year, and honestly, many buyers are beginning to adjust to that reality.
The challenge? Affordability. Monthly payments have climbed big time, and that’s forcing both buyers and sellers to get creative. Builders and homeowners are offering everything from interest rate buydowns to help with closing costs.
Here’s the move:
If you’re a buyer, don’t wait around for 3% rates to come back—they’re not. Focus instead on the monthly payment, your upfront costs, and maybe even refinancing later if rates come down.
If you’re selling, offering incentives might attract more attention than another price drop. I’d be happy to help you weigh your options and see what makes sense in your price range.
INVENTORY IS UP—AND BUYERS HAVE MORE LEVERAGE
Here’s something we haven’t seen in a while: more sellers than buyers. Inventory is up nearly 34% nationally, and even in hot pockets of L.A., more listings are coming online than we’ve seen in recent years.
Between folks returning to the office, affordability tightening, and some sellers finally deciding to stop waiting, the balance of power has shifted.
According to Redfin’s Asad Khan, it’s officially a buyer’s market in many areas, especially across the South and West Coast.
What this means for you:
If you're a buyer, you’ve got leverage. Use it. There’s more inventory to choose from, and you don’t need to rush into every open house like it’s a race.
If you’re selling, it’s time to adjust. Staging, pricing, and strategic marketing matter more than ever. I can help get your home positioned right so it stands out in this new environment.
PRICES ARE STILL HIGH—BUT THE MARKET IS COMING BACK TO EARTH
Home prices are still elevated, but they’re not skyrocketing anymore—and that’s a good thing. In fact, according to Newsweek, prices have dipped in over half of U.S. states so far this year, especially in the Sun Belt.
The median home price is expected to stay mostly flat in Q3 and drop about 1% by year-end. We’re not talking about a crash—more like a soft landing from a very overheated market.
Affordability remains a fundamental issue: a household earning $75K can now only afford about 20% of homes for sale. That’s way down from the 50% range pre-pandemic. And until we see meaningful change in wages or supply, this pressure isn’t going away.
Bottom line:
If you’re buying, softening prices could mean better deals, especially on homes that have been sitting.
If you’re selling, you’ll need to price realistically from the jump. The “shoot for the moon” pricing strategy doesn’t work anymore. I can help you find the sweet spot between competitive and compelling.
READY TO MOVE SMART IN THIS MARKET?
National trends give us a snapshot, but real estate is always local, and Los Angeles is at its best. What’s happening in Hancock Park or Mid-Wilshire might look completely different than Beverly Hills or Santa Monica.
Whether you’re ready to buy, thinking about selling, or just exploring options, I’m here to help you sort through the noise and make confident decisions.
Let’s put a bright plan together that’s tailored to you. DM me, text me, or reach out through my site if you want to talk real estate, market strategy, or get a second opinion on your next move.
Sources:
National Association of Realtors - https://www.nar.realtor/newsroom/americas-housing-affordability-gap-persists-households-earning-75000-annually-can-afford-less-than-a-quarter-of-for-sale-home-listings
Zillow - https://www.zillow.com/research/home-value-sales-forecast-33822/
National Association of Realtors - https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales
Newsweek - https://www.newsweek.com/map-shows-home-values-dropping-half-country-housing-market-shifts-2074904
National Association of REALTORS® Residential Economic Issues & Trends Forum - https://www.nar.realtor/newsroom/nar-chief-economist-lawrence-yun-says-mortgage-rates-fast-rise-hurt-housing-market-during-realtors-legislative-meetings
National Association of REALTORS® Legislative Meetings 2025 https://cms.nar.realtor/sites/default/files/2025-06/2025-realtors-legislative-meetings-residential-economic-issues-and-trends-forum-lawrence-yun-presentation-slides-06-03-2025.pdf?_gl=1*166ceye*_gcl_au*MTUxMjAyMjU3Ny4xNzQ2ODI4MDcz
Redfin - https://www.redfin.com/news/home-price-forecast-decline-2025/