The number of properties sold in California over the past three years was 24% lower than the same time period before the Great Recession, sparking fears of a statewide crash.
The Golden State had 954,423 property sales in 2023-25, down from 1.25 million in 2007-2009, according to figures from real estate data provider Attom.
That means homebuying in California was 24% slower over the past three years than it was in the run-up to the apocalyptic housing crash that triggered the Great Recession.
California’s sales pace over the past three years is down 31% compared to the previous 18 years, while the nationwide drop was 6%.
But while the statewide median property price plummeted 55% — from nearly $600,000 in 2007 to roughly $275,000 in 2009 — prices have actually increased over the past three years, the Orange County Register’s business columnist Jon Lansner reported.
California’s median home price rose 9% from December 2022 to December 2025, reaching $710,000, just 5% below its all-time high.
When the subprime mortgage market collapsed, many homeowners couldn’t find a buyer and walked away from their houses after foreclosures, as the Fed lowered interest rates.
As people were forced out of homes they couldn’t afford, the resulting oversupply tanked property values.
But the current Mexican standoff in California stems from the lock-in effect: owners with 3% mortgage rates refuse to sell and move into a new 7% rate, keeping the market frozen.
Sellers reluctant to lose their low rates and buyers unable to afford high ones result in today’s stagnant market, keeping prices high because inventory is scarce.
On top of that, the first-time buyer affordability index shows less than a third of California households could qualify for a starter home in 2023-25.
Only 30% of households in the state qualified, down from 49% in 2007-09, according to figures from the California Association of Realtors.
Earlier this year, 30-year mortgage rates dipped below 6% for the first time since 2022, offering potential relief to would-be homeowners.
But Lansner warned that no rapid price correction is likely.
In the three years after the Great Recession, California housing sales grew by just 8% while home prices recovered by 15% through the end of 2012, according to official figures.
