Every prospective buyer, seller, and investor is asking the same question as we move through 2025: Are we going to see the kind of housing market crash in Los Angeles that we saw in 2008?
With home prices still high by historical levels, mortgage rates now passing 6.8%, and affordability on the verge of collapse for many Angelenos, no wonder there is a bit of anxiousness!
🏠 Los Angeles Housing Market 2025
Will Home Prices Crash? Latest Data & Analysis
📊 Current Market Snapshot (June 2025)
2007-2012 Crash
-35% price decline
High foreclosures
Excess inventory
High unemployment
2025 Market
+0.5% price growth
Low foreclosures
Limited inventory
Strong employment
Key Difference
Supply shortage vs oversupply
Stricter lending standards
Different economic conditions
🔮 2025-2026 Forecast
• Continued price appreciation (3-5%)
• Inventory may increase slightly
• Mortgage rates around 6.8%
• No crash expected
• Steady growth continuation
• Potential rate cuts by Fed
• Increased affordability challenges
• Market stabilization
• Long-term appreciation expected
• Rental properties viable
• High barrier to entry
• Quality over quantity approach
🎯 Bottom Line: No Crash Expected
Unlike 2008, the current LA housing market shows strong fundamentals with low inventory, stable employment, and strict lending standards.
While affordability remains a challenge, a housing crash is unlikely given supply constraints and demographic demand.
For Sellers: Market remains favorable with quick sales and strong prices
For Investors: Long-term appreciation likely, but high entry costs
Last Updated: June 29, 2025 | Analysis based on most recent available data
