5 California Housing Markets That Will Plummet in Value by the End of 2025
Written by
Laura Beck
Edited by
Ashleigh Ray
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California’s housing market is in for a wild ride! After years of skyrocketing prices, some areas are potentially poised for a serious nosedive. If you’re a homeowner, investor or just dreaming of snagging that Golden State property, pay attention.
California finally saw population growth in 2023 after three years of decline, but don’t break out the champagne just yet. The aftermath of strict COVID policies and sky-high living costs is still rippling through the real estate scene. With the third-highest cost of living in the nation, California’s housing recovery is moving slower than molasses in January.
“California’s housing market demand will take time to recover, but recovery is happening, albeit slower than usual,” said Anthony DeLuca, an expert contributor at RetireGuide.
So, which areas are headed for a freefall? GOBankingRates talked to insiders to get the scoop on which California housing markets are about to take a tumble.
San Diego
Once hotter than a summer day in Death Valley, San Diego’s market is now giving sellers the chills. Check out these jaw-dropping stats:
- 9% decrease in home values
- 23% increase in newly listed homes
- 80% surge in inventory
If you’re house-hunting in San Diego, you might just score a bargain by 2025. But homeowners, brace yourselves for a potentially bumpy ride.
Willits
Nestled in Mendocino County, Willits is seeing home values drop quickly. According to DeLuca, it’s a rather large 10.01% decrease. If this trend continues, 2025 could see some seriously slashed prices in this small city.
Ukiah
Just a hop, skip and a jump from Willits, Ukiah is feeling the pain too. With a 6.52% decrease in home values, this Mendocino County town might be a place to invest if you’re looking for a deal next year. By 2025, buyers might find some real steals here.
Clearlake
Even picturesque Lake County isn’t immune to the market meltdown. Clearlake has witnessed a 5.62% dip in home values. If you’ve been eyeing a lakeside retreat, 2025 might be the time.
West Hollywood
Los Angeles isn’t immune from the potential drops. West Hollywood, smack dab in the heart of LA county, has seen a 3.25% decrease in home values. By 2025, you might be able to snag a slice of Hollywood glamour at a big discount.
The Bigger Picture
Before you start packing your bags for the California exodus, let’s zoom out and look at the bigger picture:
- Building Bonanza: California aims to construct 2.5 million new homes by 2030. More supply could mean even lower prices in some areas.
- Slow and Steady Loses the Race: SiliconValley.com predicts a measly 4.6% home price increase through April 2025 – that’s 2.3% lower than last year’s growth.
- Foggy Future Up North: Northern California, especially areas affected by coastal fogs, seems to be taking the biggest hit.
If you’re a potential homebuyer, these declining markets could be a breath of fresh air. But for current homeowners, it might not be the news you want to hear. Of course, this is all speculation, so everything should be taken with a giant grain of salt.
As California continues to wrestle with its housing headaches, including affordability issues and ambitious building goals, the next few years will be a rollercoaster ride for the state’s real estate scene. If you’re looking for a deal or a steal, keep your eyes focused on these locations.
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