As we always do this time of year, reflecting on the past year is essential for understanding where our market is heading, and this annual review is one of the highlights of our calendar. We enjoy analyzing the final stats to uncover the real story behind the sales trends in San Pedro, Rancho Palos Verdes, and the South Bay. It is time to look past the headlines and focus on the data. So, how did 2025 stack up? Let’s dig in! 

As reported last year, 2024 was defined by mortgage rates hovering between 6.5% and 7%, which kept sales volume relatively restrained. Going into 2025, predictions called for a “loosening” of monetary policy and a decline in rates to the high 5% range. In reality, 2025 proved to be a year of stabilization rather than dramatic shifts. While rates moderated slightly—averaging near 6.6% for much of the year—the market found a new rhythm. Buyers returned with cautious optimism, and inventory levels improved, offering more choices to those buyers entering the market. So how did our local market perform in 2025? According to MLS statistics (2025 vs. 2024) through December 15th, the South Bay remained stable with steady gains in both activity and value.

In San Pedro, there were 271 SFRs sold, which was a slight increase (+0.7%) compared to the 269 homes sold in 2024. The median sales price was $1,000,000, which increased (+5.2%) from $950,000 the previous year. Average days on market (DOM) ticked up to 38 days compared to 33 in 2024, reflecting a more balanced pace where buyers took their time to choose the right home.

In neighboring Rancho Palos Verdes, the market remained steady. There were 300 homes sold, up (+6.4%) from 282 homes sold in 2024. The median sales price of $1,872,000 remained flat and was virtually identical to 2024. Notably, the average DOM increased to 50 days compared to 34 in 2024, further signaling that while demand is strong, buyers are becoming more selective.

Overall, in the Greater South Bay, there were 3,143 SFRs sold, a healthy increase (+4.1%) from 3,018 homes sold in 2024. The median sales price for the region climbed (+7%) to $1,285,000, up from $1,200,000 in 2024. The average DOM for the region increased from 32 days to 37 days in 2025.

The data tells us that our local market remained stable, with 2025 displaying modest increases from 2024 in both volume and price, despite rates not dropping as low as initially forecast. The local market showed resilience, outpacing many statewide trends.

What can we expect in 2026? The California Association of Realtors® (C.A.R.) projects a continued gradual rebound. They forecast existing single-family home sales to rise (+2.0%) to 274,400 units next year. The statewide median home price is expected to reach a new record of $905,000, a projected increase of +3.6%. Crucial to affordability, C.A.R. expects the average 30-year fixed mortgage rate to finally dip further, hovering in the 6.0% range in 2026.

With inventory levels slowly normalizing and rates trending downward, we anticipate 2026 will offer even more opportunities for both buyers and sellers to make their move. Wishing you all a Happy New Year!

Mike Harper and Peter Hazdovac are both licensed Realtors® and co-owners of HH Coastal Real Estate, an independent local brokerage.

For more info, visit www.hhcoastal.com.