The California housing market in January 2025 presents a complex landscape characterized by contrasting trends in pricing and sales activity. The Median Sales Price has decreased by 2.0% year-over-year, settling at $785,200. This decline in sales price contrasts with the Median List Price, which has risen by 12.5% to $849,100, indicating a potential gap between seller expectations and buyer willingness.

Price Per Square Foot metrics further illustrate this divergence. The median Price Per Square Foot has increased by 4.9% to $494, while the Median List Price per square foot has risen by 6.3% to $524. This suggests that while sellers are optimistic about the value of their properties, buyers are negotiating prices down, resulting in a lower sales Price Per Square Foot.

Sales activity shows a slight increase, with Homes Sold rising by 0.2% year-over-year to 16,355 units. However, Pending Sales have decreased by 5.2%, indicating a potential slowdown in future transactions. The number of New Listings has surged by 20.4%, reaching 29,347, contributing to a significant increase in inventory, which is up by 23.7% to 56,895 homes. This increase in supply is reflected in the Months of Supply, which has risen dramatically by 70.0% to 3.5 months, suggesting a shift towards a more balanced market.

The Median Days on Market have increased by 8.0% to 53 days, indicating that homes are taking longer to sell. The average sale to list ratio has slightly decreased by 0.2% to 99.2%, and the percentage of Homes Sold above list price has dropped by 2.7% to 33.3%. These metrics suggest that buyers are gaining more negotiating power, leading to more price reductions, which have increased by 2.8% to 21.1%.

Additionally, the percentage of homes going off the market in two weeks has decreased by 3.9% to 33.2%, further highlighting the cooling pace of the market. Overall, the California housing market in January 2025 is experiencing a shift towards increased inventory and longer selling times, with sellers adjusting their expectations in response to changing buyer dynamics.