Is the California Housing Market Shifting in 2026? What Buyers & Sellers Should Know
Is the California real estate market shifting in 2026, and what does that mean for buyers and sellers?
After a few years of tight inventory, elevated prices, and affordability challenges, 2026 is shaping up as a transition year for California’s housing market. Rather than dramatic spikes or declines, forecasts point to modest gains, increased inventory, and more balanced conditions compared with recent years. Understanding how the market is changing can give you a real advantage, whether you plan to buy or sell a home. car.org+1
Signs the Market Is Shifting in 2026
1. Modest Increases in Sales Activity
After a relatively flat housing market in 2025, the California Association of REALTORS® (C.A.R.) projects higher sales activity in 2026. Existing single‑family home sales are forecast to rise about 2% next year, reaching approximately 274,400 homes sold, up from about 269,000 projected for 2025. This suggests more movement in the market, especially early in the year. car.org
2. Slow but Steady Price Growth
Home prices in California are expected to continue climbing, though at a slower pace than the rapid growth of prior years. The median price is projected to reach around $905,000 in 2026, a forecasted 3.6% increase compared to 2025. The growth is not explosive, but it does represent stability rather than decline, an important signal of a shifting yet resilient market. car.org
3. Inventory Is Improving
One of the biggest changes heading into 2026 is more available housing supply. Forecasts suggest active listings could rise by about 10%, approaching near pre‑pandemic levels. More inventory typically means fewer bidding wars and more choices for buyers, which can ease upward price pressure and help balance the market. car.org
4. Slight Improvement in Affordability
Affordability, long a major challenge in California, is expected to inch up slightly in 2026. The share of households able to afford a median‑priced home is forecast to rise to about 18%, up from roughly 16% in 2024 and 17% in 2025. While still low historically, this gradual improvement could bring more buyers off the sidelines. The Almanac
5. Mortgage Rates May Ease
Mortgage rates have been a key factor affecting buyer demand. Forecasts indicate that the average 30‑year fixed mortgage rate may decline toward around 6% in 2026, lower than the mid‑to‑high rates seen in recent years. Even a modest rate drop like this can improve monthly payment affordability and expand buyer interest. The Almanac
What This Shift Means for Buyers
If you’re considering buying in California in 2026, here’s what the market trends suggest:
🟦 More Choices
A modest increase in inventory gives buyers more options, especially in markets that were once hyper‑competitive.
🟩 Better Negotiation Leverage
With higher supply and slower price escalation, buyers may have a bit more negotiation power on price and terms compared with the seller’s market of recent years.
🟨 Patience Pays Off
Even though prices are still rising, the slower pace gives buyers time to research neighborhoods, evaluate affordability, and make thoughtful decisions.
🟧 Focus on Total Costs
With still‑elevated prices and living costs in many areas, buyers should weigh all ownership expenses, including taxes, insurance, and maintenance, when considering offers.
✅ Short‑term tip: Get pre‑approved early, track listings closely, and be ready to act when you find the right home.
What This Shift Means for Sellers
For sellers, the 2026 market environment is a balanced mix of opportunities and considerations:
📈 Stable Price Growth
Prices are projected to rise, not skyrocket, which can help sellers preserve equity while avoiding abrupt downturn risks.
📊 More Buyer Activity
More active listings and slight affordability improvements may draw back buyers who held off during peak cost years.
🤝 Strategic Pricing Is Key
With more choices for buyers, strategic pricing and presentation will be crucial to attract competitive offers.
🔎 Marketing Wins
High‑quality listing photos, virtual tours, and clear highlights of your home’s lifestyle benefits can differentiate your property in a steadier market.
🗓️ Seasonal Advantage
Listing early in 2026, before the spring influx of new inventory, can help your property stand out and catch motivated buyers before the competition rises.
Why 2026 Is Different (But Not Drastic)
The evolving California market in 2026 isn’t about sudden shifts or dramatic swings, it’s about gradual change and stabilization:
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- Sales activity is increasing modestly rather than booming.
- Prices are rising but not at the frenzied pace of the past decade.
- Inventory is improving, easing buyer pressure.
- Affordability is slowly improving, giving more buyers a chance to participate.
In other words, the market is shifting toward balance rather than volatility, a welcome development for both buyers and sellers who want predictability and confidence. The Almanac
Final Takeaway
Yes, the California housing market is shifting in 2026, but in a measured, balanced way. It’s not a crash, nor is it runaway growth. Instead, you’re seeing:
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- More inventory
- Moderate price gains
- Easing mortgage rates
- Slightly better affordability
- More thoughtful buyer and seller engagement
This market may reward prepared, informed, and patient participants, whether you’re buying your first home, moving up, downsizing, or selling for top value.
Take Action Today
If you want clarity and confidence in this evolving market, let’s talk.
Call Cyndi today at 661‑510‑5516 to:
- Get updated local market insights for Valencia, Santa Clarita, San Fernando Valley, Los Angeles, Burbank, Glendale, and beyond
- Discuss whether now is the right time to buy or sell
- Develop a tailored strategy that aligns with your goals
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