Introduction
Southern California’s housing market continues to face one of its toughest periods in decades. Despite a wider selection of homes on the market this year, buyers are holding back. Sales numbers for June 2025 reveal the second-slowest June on record since data tracking began in 2005. With prices at historic highs and mortgage rates weighing heavily on affordability, the region’s real estate landscape is at a crossroads.
A Market Slump with Historic Depth
In June, only 14,445 homes were sold across Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura counties. While this figure represented a slight 3 percent increase compared to June 2024, it is still 35 percent below the long-term 21-year average.
The numbers underscore how deep the slowdown has become. The only June with fewer transactions in the past two decades was last year, 2024. This means the two worst Junes on record occurred consecutively, even performing worse than during the Great Recession. Over the first six months of 2025, total sales reached just 83,357, placing this year in third place for the weakest start since 2005. Only 2023 and 2024 were slower.
Prices at Record Levels
At the center of the slowdown lies an affordability crisis. The median sales price across the six-county region hit $835,000 in June, setting a new record and climbing 3 percent compared to the previous year. Orange County led the way with a staggering $1.21 million median, followed by Los Angeles at $915,000 and San Diego at $900,000.
Even with sales activity lagging, home values remain elevated. This dynamic highlights a persistent imbalance between supply and demand, where prices are supported by limited inventory even as many buyers step away.
Mortgage Rates and Rising Costs of Ownership
Adding to the pressure is the rise in borrowing costs. According to Freddie Mac, the average 30-year fixed mortgage rate in the three months leading into June stood at 6.8 percent. This represents a significant increase from 5.2 percent three years ago and is more than double the record low of 2.7 percent seen in late 2020.
The California Association of Realtors estimates that households now need an annual income of $218,400 to comfortably purchase a median-priced single-family home in Southern California. This threshold has risen by 21 percent in just three years, and only 14 percent of households in the region meet that requirement.
Inventory Growth but Limited Relief
One notable shift this year has been an increase in available homes. The six counties combined averaged 34,300 homes listed for sale in the first half of 2025, representing a 50 percent jump from last year and more than double the supply compared to three years ago.
Yet, despite the growth, inventory is still 21 percent lower than pre-pandemic levels in 2019. Without a full return to balanced supply, prices have remained stubbornly high. Buyers face more options, but not enough to bring significant price relief.
The Strain on Entry-Level Buyers
The slowdown is especially evident at the lower end of the market, where first-time buyers and budget-conscious households are most affected. Rising living costs, economic uncertainty, and ongoing affordability challenges have discouraged many from pursuing homeownership.
Sales of single-family homes reached 10,941 in June, up 4.5 percent from last year, yet still the second-lowest June ever recorded. The median price for these properties hit an all-time high of $887,500. Condominium sales painted a similar picture, with just 3,504 transactions and a median of $688,875. Both figures reflect constrained activity in traditionally more affordable segments.
Regional Perspectives
Breaking the data down by county reveals that affordability challenges are not uniform across the region.
- Riverside County recorded 2,367 sales, its slowest June in 21 years, with a median price of $600,000 that remained unchanged over 12 months.
- San Bernardino County saw 1,677 sales, also marking its slowest June, with a median price of $525,000.
- Ventura County had 621 sales, up 7.1 percent from last year, with a record-high median of $890,000.
- San Diego County posted 2,307 sales, its second-slowest June, though its median price of $900,000 fell slightly by 1.6 percent.
- Los Angeles County had 5,348 sales, climbing 6.3 percent year over year, while reaching a record median price of $915,000.
- Orange County recorded 2,125 sales, a modest increase of 1.2 percent, but its median price of $1.21 million was an all-time high.
These figures show that while demand has weakened across the board, higher-priced counties are still achieving modest sales growth, while more affordable counties such as Riverside and San Bernardino are facing the sharpest slowdown.
Conclusion
Southern California’s housing market is navigating an extraordinary contradiction. Prices remain at record highs even as sales volumes sink to historic lows. Rising mortgage rates, limited affordability, and broader economic uncertainty continue to weigh heavily on buyer confidence. Although more homes are coming onto the market, it has not been enough to create meaningful price relief.
For buyers, sellers, and investors, this environment demands careful strategy and expert guidance.
At Boutique Realty, we help our clients understand these shifting dynamics and make confident decisions in a complex market. Whether you are buying your first home, managing investment property, or considering selling in today’s climate, our team provides local expertise and tailored solutions. Connect with us today to explore your options and position yourself for success in Southern California real estate.