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California remains a prime destination for real estate investors in 2025, thanks to its strong economy and high demand.
Read this article to see why investing in California real estate still makes sense this year. If you’re ready to explore opportunities, check out our California real estate spreadsheet to assess profitability and make informed decisions.
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.
1) California's real estate market is set to boom with a 10.5% rise in home sales and a 4.6% price hike
In 2025, California's real estate market is projected to see a 10.5% rise in home sales and a 4.6% increase in the median home price to $909,400, according to the California Association of Realtors.
These figures indicate strong demand and a healthy market, driven by economic growth, job opportunities, and desirable living conditions.
The rising sales and prices suggest significant investment potential, with California's diverse economy and population growth offering promising opportunities for real estate investors.
Source: California Association of Realtors (C.A.R.)
We created this infographic to show how property prices vary across different cities in California. It shows the median price as well as the price per sqft, making it easy to see which places might offer the best value. We hope you find it helpful.
2) California's rental vacancy rate is a low 5.2%, signaling strong rental demand
In 2024, California's rental vacancy rate was 5.2%, 21.2% below the national average, indicating strong demand for rental properties.
This demand is fueled by the state's thriving economy, diverse job market, and appealing lifestyle, particularly in cities like Los Angeles, San Francisco, and San Diego.
As more people move to these areas, the need for rental housing increases, ensuring properties are rarely vacant.
Investing in California real estate in 2025 appears wise, with low vacancy rates promising steady income and potential property value appreciation.
Sources: iProperty Management, United States Census Bureau
- Why is 2025 an excellent time to buy property in San Francisco? Let's look at the data!
3) California homes only stay 36 days on the market (they do sell fast)
In October 2024, California homes had a median market time of 36 days, 6 days longer than the previous year, per Redfin.
Despite this increase, the quick turnover indicates strong demand and market liquidity, beneficial for investors seeking timely transactions.
This swift sales pace reflects a balanced supply and demand, suggesting active buyers and potential for higher returns.
As we approach 2025, California's short market times and appealing conditions make it a promising real estate investment opportunity.
Source: Redfin
4) California's median home price jumped 6.8% to $869,500, showcasing a robust real estate market ripe for investment
In 2024, California's median home price increased by 6.8% to $869,500, mirroring the previous year's growth from $814,000.
This consistent rise indicates a robust real estate market with strong demand and economic conditions favorable for investors.
California's thriving market, driven by its diverse economy and desirable living conditions, suggests continued property value appreciation and promising investment opportunities in 2025.
Source: California Association of Realtors (C.A.R.)
We pulled out the latest data to make this infographic. As you can see, it shows how real estate values have changed over the past 10 years in California vs other major places in California. Here, the percentage increase or decrease in market value will help you see long-term trends.
5) California's tech industry added over 41,000 jobs, boosting real estate demand
In 2024, California's tech industry added over 41,000 jobs, totaling nearly 1.6 million workers.
The sector contributed 19% of the state's gross regional product, or $623.4 billion, in 2022, underscoring its economic importance.
This growth boosts the real estate market, particularly in tech hubs like the Bay Area, as increased demand for housing and commercial spaces follows the influx of skilled workers.
Investing in California real estate in 2025 seems promising due to the tech sector's expansion, which drives housing demand and potential property value appreciation.
The tech industry's economic impact solidifies California's status as an innovation leader, attracting global talent and investment, and creating opportunities for real estate investors.
Sources: CompTia, The California Chamber of Commerce
6) California's foreclosure rate is super low: 0.8%
In 2024, California's foreclosure rate was just 0.8%, indicating a stable real estate market.
With 2,915 foreclosure starts and 306 completed foreclosures in October, California effectively manages its market.
This low rate reflects economic strength and homeowner stability, reducing the risk of market downturns.
The minimal foreclosures highlight the state's ability to handle defaults without market disruption.
These factors make California a promising real estate investment opportunity in 2025, offering stability and growth potential amidst national economic fluctuations.
Source: ATTOM
7) California's job growth rate of 1.6% added 284,400 jobs
California's job growth rate in 2024 was 1.6%, adding 284,400 nonfarm jobs from July 2023 to July 2024.
This steady increase indicates economic vitality, boosting housing demand and potentially raising property values and rental prices.
A stable growth rate suggests a sustainable economy, reducing investment risks and making California attractive for real estate in 2025.
The consistent job addition implies a continuous influx of residents, supporting long-term real estate gains.
Source: Employment Development Department State Of California
We created this infographic using the latest market data to highlight the most competitive real estate markets in California is vs. other major cities in California. It shows the percentage of sales above the list price, a key indicator of market competition.
8) California's 800-mile high-speed rail is set to boost real estate growth
California's 800-mile high-speed rail network is transforming the state's real estate market by enhancing accessibility between major cities like Los Angeles and San Francisco.
This project is expected to boost real estate growth along its corridors, presenting prime opportunities for investors.
By reducing travel time, the rail network makes previously remote areas attractive for homebuyers and businesses, likely increasing property values.
Investing in California real estate in 2025 is wise, as the rail project nears completion, enhancing connectivity and attracting diverse industries and talent, further fueling the market.
Source: Infra Info Hub
9) The California Forever Project is here to tackle housing shortages and boost the local economy
The California Forever Project, backed by Silicon Valley investors, aims to develop a new city in Solano County to address housing shortages and create a sustainable urban environment.
This initiative reflects growing interest in California's real estate market and is set to transform the region by providing new housing and boosting the local economy.
The project's focus on sustainability aligns with global eco-friendly trends.
With significant backing, California remains a promising real estate investment in 2025, highlighting its growth potential and profitability.
Source: Business Insider
10) California's net-zero rail emissions goal by 2035 will make you want to buy a property
California aims for net-zero rail emissions by 2035, highlighting its commitment to sustainable infrastructure and positioning it as a leader in eco-friendly development.
This initiative supports a modern transportation network, fostering long-term growth and stability, which attracts real estate investors.
Aligning with global trends, California's focus on sustainability enhances property values, offering promising investment opportunities.
Prioritizing sustainable infrastructure ensures a resilient real estate market, making California an attractive investment destination.
Source: U.S Department of Transportation Federal Railroad Administration
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So, is California a great real estate choice? Absolutely!
California's real estate market is thriving, making it a fantastic choice for investors in 2025.
With a projected 10.5% rise in home sales and a 4.6% increase in median home prices to $909,400, the market shows strong demand and growth potential. The state's diverse economy and job opportunities further enhance its appeal, ensuring a healthy market environment.
Additionally, California's low rental vacancy rate of 5.2% and quick home sales (just 36 days on the market) highlight the robust demand for both buying and renting. The tech industry's expansion, adding over 41,000 jobs, and the state's commitment to sustainable infrastructure, like the 800-mile high-speed rail, promise continued growth and investment opportunities.