The 2024 Southern California market normalized with stable prices, steady rates around 6.5-7%, and an 18% increase in transaction volume over 2023. Heading into 2025, conditions look genuinely favorable for both buyers and sellers.
The 2024 Appraisal Year by Numbers
In 2024, I completed 784 appraisals across Orange County, Los Angeles County, and Ventura County. That's up 18% from 2023 (664 appraisals).
The increase isn't explosive, but it's consistent. More appraisals means more transactions, which means a market that's functioning normally.
What Normalized Means
In 2023, the market was in crisis mode. Prices were falling, interest rates were volatile, inventory was critical, and appraisers were pulled in different directions by conflicting market signals.
In 2024, none of that is true. We have:
- Stable prices — Not growing fast, but not falling
- Stable rates — Hovering around 6.5-7%, enabling planning
- Reasonable inventory — Not abundant, but enough for buyers to have choices
- Clear appraisal patterns — Strong data, defensible value conclusions
That's what normalized markets look like.
The 2024 Regional Story
Orange County: Steady improvement throughout the year. Summer was strongest. Fall remained solid. Price appreciation 0-2% annually.
Los Angeles County: Mixed. Premium areas (coastal, canyon views) held value. Standard neighborhoods more volatile. Average appreciation 0-1%.
Ventura County: Slower than Orange County. More rate-sensitive. Appreciation minimal.
Inland Empire (Riverside/San Bernardino): Investor activity returned. Newer construction active. Appreciation 1-3%.
Interest Rate Impact
The Federal Reserve kept rates elevated through 2024. That's the opposite of what many predicted in late 2023, but it happened.
The market adapted. Buyers adjusted expectations. Sellers adjusted pricing. The friction that high rates created became normal friction rather than market-breaking friction.
Looking at 2025
There's genuine optimism heading into 2025. Here's why:
Rate Cut Anticipation: The Fed is expected to cut rates in 2025, possibly multiple times. That would lower mortgage rates from 6.5-7% to 5.5-6.5%.
Activity Acceleration: If rates drop 0.5-1%, transaction volume should increase notably. More transactions mean better market dynamics.
Inventory Potential: If rates drop, some homeowners will feel urgency to sell (fear of missing out). Inventory could increase, creating more choice for buyers.
Buyer Enthusiasm Return: Buyers have been cautious in 2024. Rate cuts would trigger enthusiasm, which drives activity.
The 2025 Forecast
I'm predicting:
- Q1 2025: Slow winter seasonality, but better than Q1 2024
- Q2 2025: If rate cuts happen, moderate surge in activity
- Q3-Q4 2025: Sustained activity if rates settle at lower levels
- Overall 2025: Significantly more activity than 2024 if rates drop as expected
That could mean 900+ appraisals for me in 2025 versus 784 in 2024.
Risk Factors
Not everything is rosy. If inflation resurges and the Fed delays rate cuts, market momentum slows. If recession fears return, buyer confidence wanes.
But right now, those are risks, not reality.
What Homeowners Should Know
If you own a home, you own something in a normalized market. That's good. Values are steady, and rate environment is predictable.
If you're thinking about selling in 2025, spring could be strong if rate cuts materialize.
If you're thinking about buying, waiting for rate cuts might make sense (you could save 0.5-1% on your mortgage). But if rates don't drop, waiting is costly.
If you're refinancing, monitor rate drops in early 2025. If cuts happen, windows open quickly.
Personal Reflection
In 40+ years of appraising, I've seen market cycles. 2024 felt like recovery. 2025 is shaping up to feel like growth.
I'm optimistic about the market I'm appraising in and the opportunities homeowners will have in the coming year.
Here's to 2025 being genuinely better.