9 Predictions for the California Housing Market in 2030
Written by
Jordan Rosenfeld
Edited by
Molly Sullivan
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California remains a coveted state for people to move to and buy homes because of its unique mix of temperate climate, steady economy and wide variety of industries.
However, California’s housing market has grown so steep, some fear it is already pricing average middle-class families and individuals out of being able to buy there.
Real estate experts predicted what they think will happen to California’s housing market in the next five years, by 2030.
House Prices Will Continue To Rise
Historical evidence has shown California home prices trending upward with the occasional correction, according to Mark Wei, a real estate expert and creator of PropertySensor.
“Over the last decade, we have had a 70% state-wide gain in the median house price with certain areas — even the beach cities — showing higher appreciation. Unless we have a total economic collapse, I do not believe that trend ends by 2030,” Wei said.
Pricier Areas Might See Some Decline
While home prices are still on the high side, Wei said that purchasing power is down. “If rates remain at their current levels, we might actually have price increases decelerate within the pricier areas, with demand instead forcing into the secondary markets.”
He said “double digit gains” have already occurred in cities like Riverside, Sacramento and the inner parts of the Central Valley over the past couple of years due to buyers leaving the Los Angeles area and the Bay Area.
Multifamily Home Demand Will Increase
California may see greater demand for multifamily homes in five years, as well, Wei said. “We’ve had a 40% increase in multifamily applications state-wide over the past two years due to zoning reform.”
While the single-family dwelling will still remain desirable, he said “increasingly the price is no longer worth the value if a $1 million starter house comes with a payment of $7,000 plus.”
More Work-From-Home Spaces
In addition to the demand for multifamily homes, Mamta Saini, a real estate expert and CEO of We Buy Houses in the San Francisco Bay Area, suggested that “properties with flexible spaces for home offices command a 15% to 20% premium over traditional single-family homes.”
This trend will likely accelerate, Saini said, with as much as 40% of all new construction by 2030 incorporating dedicated work-from-home spaces.
Climate Impacts Will Affect Housing
Wei pointed out that “climate risk is a real deal” that is constricting insurance coverage in California. “If this trend persists, we might find that insurability becomes a new driver of housing value with premium-priced housing being located in areas of low threat.”
This may mean that coastal communities, often sought after, will see declines as they bear the brunt of sea level rise and erosion. Other areas prone to wildfires may suffer similar decline.
Because of climate impacts, Saini said, “Properties with sustainable features and resilient design elements sell 10% faster than comparable traditional homes.”
Saini suggested that by 2030, homes with solar panels, energy-efficient systems and drought-resistant landscaping “will become the standard, not the exception.”
ADU Construction Will Increase
California’s housing shortage won’t magically fix itself, according to Johnny Austin, a real estate agent and owner of Home Offer Express.
“Look for a surge in backyard granny flats — ADUs- and three-generation floorplans,” he said, in cities like San Diego, which are fast-tracking permits for these projects.
“If you own a single-family home, adding an ADU now could double your resale appeal by 2030, mainly near universities or hospitals where demand for affordable rentals is insane.”
Tax Reforms Could Shock the Market
Tax reforms could also have a big impact, Austin said. “Prop 13 protections for inherited properties are on thin ice. If California axes this — politicians are quietly debating it — heirs could face massive tax reassessments, forcing sales of family-owned homes,” he explained.
He recommended that older homeowners consult estate planners now to lock in trusts or LLC structures.
Water Rights Will Reshape Rural Homes
Droughts will make water access a premium, Austin said, which will affect properties with farms in places like the Central Valley and homebuyers in rural areas. He recommended, “Check a property’s water credits and if it’s on groundwater versus state allocations. A home with a private well could be worthless if the aquifer dries up.”
Boomer Sell-Offs Will Flood Certain Markets
If you’ve ever wanted to buy a luxury home, you may get your chance, Austin said, as 70% of California’s luxury homes are owned by folks over 60. These folks are most likely to downsize, which will leave high-end markets such as Palm Springs’ golf communities with an oversupply.
“Meanwhile, mid-priced condos near transit hubs will spike,” he said. “First-time buyers: Wait for the luxury glut, then negotiate hard. Sellers: Ditch the marble countertops and invest in wheelchair-friendly ramps. It’s what retiring buyers care about.”
While none of these predictions are set in stone, anyone looking to buy or sell in California over the next five years, should stay up to date on changes and trends.
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