The Southern California housing market continues to defy easy explanation. While ultra-luxury properties in areas like Malibu and Newport Coast continue to see active bidding and international interest, mid-tier homes across Los Angeles County are sitting on the market longer than at any time since 2019.
Economists cite high interest rates as the primary force dividing the market. Buyers with cash remain active, often competing for prime coastal properties, while traditional buyers face steep mortgage costs that limit purchasing power. As a result, demand is shifting toward smaller homes, multi-unit properties and neighborhoods that were once overlooked.
Real estate agents are also seeing a trend toward longer inspection periods, seller concessions and price adjustments in previously overheated areas. Meanwhile, major developers are slowing new construction in anticipation of a cooler 2026. Industry experts say the coming year will likely be defined by selective competitiveness—hot on the high end, cautious everywhere else.
