The 2025 Pivot: Why the Westside is Winning the "California Comeback"
The 2025 Pivot: Why the Westside is Winning the "California Comeback"
While 2025 began with many bracing for a downturn, the year is closing with a "quiet surprise" that has shifted the narrative for 2026.
Despite economic headwinds and a brief federal government shutdown earlier this fall, the housing market didn’t just hold steady—it showed a resilience that many didn't see coming.
The Q3 Surprise: Local Strength in Santa Monica & Manhattan Beach
National existing home sales rose 1.2% in Q3, a trend sparked by mortgage rates averaging 6.25%—the lowest we’ve seen in more than a year. While the national median price hit a record high of $415,200 this October, our local strongholds are operating on a significantly more robust plane.
In the South Bay and Westside, we are seeing a distinct "flight to quality." Here is how those national trends translated to our backyard:
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Manhattan Beach Resilience: The median sale price in Manhattan Beach has climbed roughly 11% year-over-year, settling at a steady $3.35M this December. Certain pockets, like the Tree and Hill Sections, have seen even more dramatic activity as buyers prioritize turnkey, designer-ready homes.
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Santa Monica & Venice (Silicon Beach): While the national average for days on market is 34, our local luxury inventory is moving with a deliberate pace—averaging between 23 and 54 days. This isn't a slowdown; it’s a normalization that allows for the thoughtful valuation and due diligence that our clients expect.
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The Affordability Shift: For the first time in years, we are seeing wage growth begin to outpace home price growth. This is giving a new wave of buyers—including the 32% share of first-time buyers nationally—the confidence to move from the sidelines back into the game as we head into January.
The "Golden State" Boomerang: Why They’re Returning
Perhaps the most compelling story of late 2025 is the California Comeback. After a period of much-publicized exodus, the tide has officially turned. California’s population has stabilized with a net gain of over 108,000 residents this year.
At Campbell Wellman, we are seeing this firsthand. Professionals who moved to "it" cities like Austin or Scottsdale in 2021 are finding their way back to the Westside. Why the return?
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The Silicon Beach Draw: The massive surge in AI innovation and aerospace has solidified Silicon Beach as the place to be for top-tier talent. The action, the capital, and the career growth are right here.
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Lifestyle Superiority: Many realized that while other states offered lower taxes, they couldn't replicate the diversity, food scene, and world-class infrastructure of coastal Los Angeles.
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Climate Reality: The novelty of a new zip code often fades after a single summer of record-breaking heat elsewhere. There is simply no substitute for a 72-degree coastal breeze in December.
The "California Dream" isn't dead; it’s just become more discerning. People are finding their way back to its unique peace, energy, and opportunity.
Looking Toward 2026
As we close out the 4th Quarter, the outlook for early 2026 is one of cautious optimism. Forecasts suggest a "muddle-through" period of stabilization in early Q1, followed by a stronger resurgence as we move toward the spring.
For sellers, this means presentation and appraisal-accurate pricing are more important than ever. For buyers, the current market offers a rare combination of lower rates and more time to choose the right asset.
There truly is no place like home—especially when that home is in Southern California.