Q4 2025: Are home prices in Los Angeles finally coming down?
Not really – they’ve mostly flattened, not fallen. The median price in LA County is slightly UP (~1-2%) from last year, and within the city, desirable neighborhoods are seeing small gains. What’s gone are the double-digit jumps; instead we have a leveling off. There are a few areas with minor dips (e.g., some condo markets or ultra-high-end pockets had ~5% price declines), but broadly, prices are holding at a high plateau. Sellers aren’t slashing prices en masse – many would rather not sell than take a big cut, which contributes to low inventory. Importantly, nominal prices have stayed high, but with inflation, you could argue real prices (inflation-adjusted) have softened a bit. For buyers, that’s some consolation. But if you’re hoping 2026 will bring a 20% drop in LA home prices, that’s very unlikely barring a major economic shock.
LA’s housing shortage and desirability create a firm floor under home values. We often say Los Angeles real estate “takes the stairs up and the elevator down” – it rises slowly and steadily (stairs) and rarely drops fast, except in severe recessions (the elevator, e.g., 2008). Right now, we’re on the stairs: slower growth, but still upward over time.
We are somewhere in between – call it a balanced market leaning slightly toward sellers in West LA. For the first time in years, buyers have some grounds to negotiate: homes aren’t selling overnight (average 40+ days on market), and roughly half of all sales are happening below asking price (often with some seller concessions). That’s very buyer-friendly compared to 2021’s feeding frenzy. Inventory, however, is still low – that’s the key metric keeping sellers in a decent position.
In Westside markets, anything under 4 months of inventory is traditionally a seller’s market, and we’re around 3 months in many neighborhoods. So good properties still get multiple offers and near asking prices. I’d say if you’re a buyer, you’ll find the market more accommodating than it’s been in years: you can take time, include contingencies in your offers (inspection, appraisal – those are commonly accepted again), and maybe snag a home at a slight discount if it’s been listed for a while.
If you’re a seller, you don’t hold all the cards anymore – you must meet the market with a fair price and expect savvy buyers. Negotiations are back. From our experience this quarter: about 1/3 of Westside sales involved some back-and-forth negotiation on price or repairs, versus virtually 0 negotiation a couple years ago. In summary, it’s not fully a buyer’s market (we’d need a lot more inventory for that), but it’s the most balanced it has been in a long time. Many consider this a healthy equilibrium.