Residential Real Estate News
California Home Sales Dip in March Amid Rising Economic Concerns
California home sales took a step back in March 2025 as growing economic uncertainty and consumer anxiety weighed on the state's housing market, according to the latest report from the California Association of Realtors (C.A.R.).
Closed escrow sales of existing, single-family detached homes totaled a seasonally adjusted annualized rate of 277,030 in March, representing a 2.3% drop from February's pace of 284,540 units. While this marked a 4.9% increase from March 2024, statewide sales have now remained below the 300,000-unit threshold for more than two and a half years.
Industry analysts point to ongoing concerns over potential tariffs, recession fears, and fluctuating mortgage rates as key drivers behind the softening demand.
"Home sales slowed in March as both buyers and sellers grew more concerned about the ongoing tariff situation and its potential impact on their personal finances," said C.A.R. President Heather Ozur. "With uncertainty weighing on those still striving for the American Dream, this is an important time for Realtors to use their expertise to guide clients through the challenges."
Pending home sales fell for the fourth consecutive month, raising concerns that the state's housing market could remain sluggish through the spring buying season. C.A.R. officials attribute the weakening sentiment to economic volatility and interest rate swings.
Despite the slowdown in sales, home prices continued to rise. The statewide median home price climbed 6.7% from $829,060 in February to $884,350 in March, and rose 3.5% year-over-year from $854,370 in March 2024. This marks the 21st consecutive month of annual price gains, although the increase remained moderate compared to historical norms.
"Despite mortgage rate swings and financial market volatility, housing conditions remained stable in March," said Jordan Levine, C.A.R. Senior Vice President and Chief Economist. "Although slower open-escrow sales point to a sluggish start for the spring season, increased inventory and modest price growth offer hope for buyers seeking more options and improved affordability."
Regional and County-Level Trends
C.A.R.'s March report revealed mixed results across California's major regions:
- Sales declined year-over-year in three out of five regions: Central Coast (-6.7%), Far North (-1.2%), and Southern California (-0.4%).
- Sales increased in the San Francisco Bay Area (6.5%) and the Central Valley (2.5%), with several Bay Area counties reporting double-digit gains.
At the county level, 31 of 53 tracked counties reported annual sales increases, with 17 showing double-digit gains. Siskiyou County led the state with a 44.4% jump, followed by Tehama (40%) and Tuolumne (40%). Conversely, Del Norte saw the steepest decline, with sales down 61.1% from last year.
Median prices rose year-over-year in all five major regions, led by the Central Coast with a 16.6% jump, thanks to sharp increases in Santa Barbara and San Luis Obispo counties. Prices rose in 39 of the 53 counties tracked, with Mendocino (48.2%), Santa Barbara (38.8%), and Tehama (24%) posting the largest gains.
However, 13 counties reported price declines. Del Norte County saw the steepest drop at 51.5%, followed by Plumas (-27.5%) and Mariposa (-18.3%).
Inventory and Market Dynamics
The state's Unsold Inventory Index (UII) -- a measure of how long it would take to sell all homes on the market at the current sales pace -- fell to 3.5 months in March, down from 4.0 months in February but up from 2.6 months a year ago.
Active listings surged, marking the 14th consecutive month of annual inventory growth and the fastest year-over-year pace since January 2023. New listings also jumped more than 20% from February, suggesting the previous month's dip was likely a short-term blip linked to financial market turbulence.
Additional key metrics from March include:
- Median days on market: 22 days (up from 18 days in March 2024)
- Statewide sales-to-list-price ratio: 100% (unchanged from March 2024)
- Median price per square foot: $430 (up from $424 a year ago)
- Average 30-year fixed mortgage rate: 6.65% (down from 6.82% in March 2024)
- As the spring market unfolds, industry experts will be watching closely to see if improving inventory and moderating price gains can counterbalance the growing caution among California homebuyers.
