With the California housing market shifting and year-to-date home sales dropping in recent months, you might wonder, “Should I sell my house in California?” Is now a good time to sell a home? While the housing market may not be as robust as it was in recent years, there are opportunities for home sellers, and clear ways to assess if the time is right for you. For example, people are leaving parts of the Golden State — but not leaving California altogether, says veteran Oceanside and San Diego real estate agent Joseph Arendsen, who sells homes 64% quicker than the average agent in the market. “We’re seeing a lot of people relocating from the Bay area and from L.A., seeking slightly better pricing, better weather, less traffic, and maybe a little better lifestyle,” he says. Whether you have a life change on the horizon, or you’re pondering a move to another part of the state or the country, we’ll walk you through what to consider when making decisions about selling a house in California. Typically, you should consider selling your California home if the circumstances provide favorable selling scenarios. The right situations might include: Historically, sellers will find the greatest success when interest rates are low and more buyers are on the hunt. The thirty-year fixed mortgage rate averaged 6.13% at the end of January, down from 7.08% in November 2022, according to Freddie Mac. According to the California Association of Realtors (CAR), this respite from rising interest rates helped edge up California home sales in December to break a three-month sales decline. But for the year as a whole, statewide home sales were down 23.1 percent from 2021, when interest rates were as low as 2.65%. In a recent California Real Estate Insights for 2023 report, HomeLight found that buyer demand in the state has been hyper-sensitive to interest rate increases. In the survey of nearly 450 top California agents, 43% say it will be a buyer’s market in 2023, compared to 34% nationally. When supply is low and demand is high, selling your home can be far more profitable. Yet the state’s inventory varies widely. According to the CAR, in December 2022, “housing inventory in California continued to rise from the previous year but dipped on a month-to-month basis as the year came to an end.” The statewide Unsold Inventory Index (UII) was more than double what was recorded in December 2021. The UII is measured in months — the number of months it would take to sell the supply of homes on the market at the current rate of sales. In December 2021, the UII was 1.2 months. In December 2022, the UII was 2.7 months. Arendsen says his area has “significantly more” inventory than last year, but that’s not astonishing, considering last year’s inventory hit record-breaking lows. The market is still shifting, with San Diego County showing about two months’ worth of unsold inventory in December, CAR records say. “We saw slightly more homes close than we had new listings on the market, so we’re not getting enough inventory right now to adjust our market,” he says. Nevertheless, if the hand of change is knocking at your life’s front door, such as a new job, a family medical crisis, or a divorce, selling your home may be unavoidable. According to our insights survey, 43% of agents in California say inventory is rising, compared to 53% nationally. If you have lived in your current California home a long time, or if property values in your neighborhood have increased to the point where you have earned a significant amount of home equity, now might be a good time to sell your California home and cash out. Obviously, this depends on your local market. Statewide, the median home price in December was $774,580, down 0.4% from November, CAR data shows. In San Diego County, the median price for single-family detached homes was $850,000 — a slight increase from 2021 but still 1.7% less than the month prior. “Across the board, prices have come down,” Arendsen says. He estimates the average drop countywide at about 11%, with coastal properties retaining more value, dropping only about 5%. In HomeLight’s survey, 29% of agents across California (a number that jumps to 38% in San Francisco) say their clients are weighing the risk of declining resale values for higher-risk homes. Curious about your home’s current value? Answer seven simple questions about your property and its condition, and HomeLight’s free Home Value Estimator tool will give you a preliminary estimate based on housing market data from multiple trusted sources. For many older Californians, downsizing may be more than a desire. It may be a necessity, either for financial, mobility, or other health reasons. If maintaining your home has become difficult, now might be a good time to sell. In our California survey, 48% of agents say their clients are looking to downsize, compared to 55% nationally. Likewise, you might need more room because your family is growing. Or maybe an elderly relative or child must come to live with you in California. Maybe your employment changed and you need a home office. The need to upsize can play a big role in your decision to sell now. The current market conditions might be ideal for a seller who also isn’t trying to buy a home, just reaping the benefits of an investment in real estate or selling an inherited property. California is an architecture lover’s dream. Let’s say you’re relocating from a Victorian home in San Francisco to a brick-and-stone spread in Napa or a Spanish-inspired home in Santa Barbara, complete with archways and red-tile roofing. If you have the financial means to pay cash for your next home, you’ll avoid any worry about fluctuating interest rates. Because of changes in your income or other financial setbacks, selling your California home now may be the only way you can avoid potential foreclosure. “Let’s say you have to move, you’re relocating for work, and you absolutely need more space, and you can’t hold on to your property because you truly need the equity out of that property,” Arendsen says. “Frankly, in a market that’s shifting like it is right now, you’ll be in a better situation than if you were trying to sell at the peak of the market.” However, some circumstances make waiting to sell your home a more viable option. Read on. Waiting to sell your California home could be your best option depending on a variety of circumstances that can create unfavorable selling scenarios. The times to consider waiting might include: When interest rates go up, home values and offer prices can come down. That doesn’t necessarily mean it’s a bad time to sell, it just means you will want to evaluate carefully your selling objectives and consider if you might benefit from waiting. Yes, upsizing can be on both the California “sell now” and the “wait to sell” lists. Is your desire to upsize based on a crucial need, or just because you think it would be nice to have the extra space? The cost to purchase a larger home now may become a burden, especially if other factors will add additional costs, such as higher interest rates or a lack of equity. Similar to evaluating your home equity when you’re considering trading up — if you have not lived in the home long enough to build sufficient equity, you may want to consider waiting to sell your California home. When supply is high and demand is low, selling your home may not be as profitable as you would like. A home that needs a lot of work can turn away potential buyers looking for a turnkey property. “People are always looking for move-in ready, renovated properties where they don’t have to do big remodels,” Arendsen says. Typically, to get top dollar for your California home, you are better off completing any remodeling projects before placing your house on the market. If your home is in poor condition or has incomplete renovations, you’re better off waiting. If you are content with your existing California home, and it fits your needs and budget, waiting to sell might be the best decision. Because mortgage rates hit record lows between 2020 and 2021, many people opted to refinance their higher mortgage rates instead of opting to buy a new home. If your monthly payment based on refinancing is lower than what you’d pay when buying a new home, you might be wise to stay put. The recent rise in home prices can be a double-edged sword. While great when you’re on the sell side, you might not be in the best financial position to make your next home purchase. If the cost of transitional housing is beyond your current reach, now may not be the best time to sell your California home. Capital gains taxes are another consideration. You may be able to avoid paying capital gains taxes on your California home sale if: In addition, the State of California and several municipalities charge a real estate transfer tax or a fee for the property transfer. In San Francisco, where the median sale price is about $1.1 million, sellers must pay $3.75 per $500 of value, or about $8,200. Talk with your California real estate agent or a tax professional for more details about your particular situation. Moving is a big decision. It’s even bigger when it involves selling what is likely the largest financial asset you have. However, top agents say that some sellers get so wrapped up in what they’ll walk away with at closing that they don’t think of the basics, such as where they’ll live once the deal’s done. Arendsen met several clients in this dilemma earlier this year. “If they sold in the first quarter of this year, where were they going to move to?” he says. “We saw people try to utilize great programs like the HomeLight Buy Before You Sell Program, but even then … there was so little inventory that a lot of clients were settling, trying to get into a property, and we didn’t have options out there. So they were taking whatever was offered. In today’s market, with elevated inventory, they’re able to get out there and find a property they love that fits them.” Even if you keep pace with up-to-date information about the housing market and your equity situation, deciding whether to sell your California home now or wait often comes down to a battle between your heart and mind. “We get this question all the time: Is now the right time to sell? And my answer is typically no — because I want to help people build wealth in real estate and turn what is their primary residence into an investment that will pay them in the future. So my advice is always — when you buy a piece of real estate — is to hold onto it as long as possible. It’s not timing the market; it’s time in the market, as they say,” Arendsen notes. He also advises homeowners to keep an eye on interest rates and your potential profit. “Typically in a healthy market, we’re seeing 5% appreciation. This year we’ve already seen an 11% decrease over the past months,” he says. “If you can do anything to hold on to that property and maybe turn it into a rental, I highly recommend you do — especially if you have an interest rate of 2%-3%. We’re probably not going to see those rates for a long time.” This depends on local nuances, as well as whether you’re interested in selling for the most money or selling your home fast. For instance, data from HomeLight’s Best Time To Sell Calculator shows that if you list your Los Angeles home in March, you could sell your house for 2.39% more than the yearly average by June. March also happens to be the best time to sell in a hurry, with homes selling four days sooner than any other month. Check your hometown in our free online Best Time To Sell Calculator to estimate your best listing time. Here are a few of our expert tips to jump-start your home sale. Pricing your home correctly is one of the toughest hurdles for a seller. In fact, 31% of sellers told HomeLight in a recent survey that determining the correct list price was their greatest challenge. Take a look at HomeLight’s Home Value Estimator for a ballpark idea of where you stand in the current housing market, then consult with a top agent for more insights. Cleaning your home and ditching the clutter helps your home to sell fast. Plus, it costs next to nothing and can add $2,500 to your home’s value at resale, top agents say. Agents like Arendsen, who has fifteen years of experience, have weathered the highs and lows of the market before and can provide expert advice on prepping your home and negotiating a great price. Find a top-performing agent near you for free in minutes using HomeLight’s Agent Match. With 69% of buyers in a recent survey telling HomeLight that they have at least one family member working from home, home office space remains a perk. “That is absolutely a good selling point,” Arendsen agrees, especially if you have a room or convertible office space on the first level. Another asset in the post-pandemic age is usable outdoor space. “A good-size, renovated backyard with an actual area to entertain outside is crucial in today’s market,” Arendsen says. In fact, agents say that simple outdoor projects such as mowing the lawn, tidying the landscaping, and spreading mulch yield a stunning return on investment, with buyers willing to pay 7% more for a house with great curb appeal. If you have the time and the budget to finish a basement or open up a floor plan, you could add to your home’s value. But even modest fixes such as touching up or redoing exterior paint, oiling door hinges, and tending to an aging roof can yield fewer headaches and a better price. With interest rates in flux, Arendsen says one of the biggest current selling points is having a way to subsidize your mortgage payment through a rental unit such as an accessory dwelling unit (ADU), a mother-in-law suite, or a multifamily property. “Those are probably the highest in demand because people purchasing with a 6.5% interest rate today can offset that cost by having a rental unit,” he says. “To add to that, we have the Baby Boomer generation needing housing, and we’re seeing a lot of families bring their parents along with them.” Some California homeowners may be considering the “for sale by owner” (FSBO) route. According to the National Association of Realtors (NAR), only 10% of recent home sales were FSBO, with sellers previously noting among their reasons that they “did not want to pay a commission or a fee.” However, 2022 data from the NAR shows that FSBO homes sold for less: a median of $225,000 compared to the median of agent-assisted homes at $345,000. Of those who went the FSBO route in 2022, 50% already knew the buyer, the NAR says. “We’re seeing less and less FSBOs because this market is harder to sell in,” Arendsen says, adding that his company offers “hands-free selling” that helps with staging and fronting the capital for necessary renovations. It also offers the type of online marketing with photos and virtual tour videos that FSBO properties can’t match. “A true professional who can help you prep the property, price the property, and market the property is more important now than ever.” For homeowners who value speed, certainty, and simplicity, HomeLight created Simple Sale, a platform that provides you with a full cash offer on your California home whenever you’re ready to sell. Simple Sale connects you to the largest network of cash buyers in the U.S. Answer a few quick questions about your home and timeline, and you’ll receive a no-obligation cash offer within a week, allowing you to close the sale in as few as 10 days. If you’re facing a life change that requires a fast home sale, or you don’t have the time or money to make needed repairs, a cash offer may be the solution you are looking for. Simple Sale provides cash offers for homes in almost any condition in California. You can skip the repairs and showings and move forward with your life plans. Life and financial circumstances play a huge role in any decision about selling your home. But we hope that these expert insights help you as a California homeowner feel more empowered and knowledgeable about your next steps. A top agent in your area in California can help guide you through the shifting tides of a changing housing market. Find one at no charge through our California Agent Match service specifically designed for Californians trying to decide if they should sell their homes now. Writer Max Efrein contributed to this story.When to sell your California home
If mortgage interest rates are low
If California housing inventory is low
If your California property value has significantly increased
If you are ready to downsize your California home
If you need to upsize your California home
You’re selling a second or inherited home in California
You can pay cash for your next home
You can’t afford to keep your California home
If they sold in the first quarter of this year, where were they going to move to? We saw people try to utilize great programs like the HomeLight Buy Before You Sell Program, but even then … there was so little inventory that a lot of clients were settling, trying to get into a property, and we didn’t have options out there. So they were taking whatever was offered. In today’s market, with elevated inventory, they’re able to get out there and find a property they love that fits them.
When to consider waiting to sell your California home
If mortgage interest rates are going up
If you’re upsizing for non-crucial reasons
If your California home hasn’t built much equity
If California housing inventory is high
If your California home has unfinished major repairs or renovations
If you’re happy with your current California home
If you recently refinanced your California home
If you can’t afford to move
If you will face steep capital gains taxes
If you have no clear game plan or objective
You aren’t mentally ready to sell your California home
What’s the best time of year to sell a house in California?
7 tips to help sell your California home
1. Price your home right
2. Deep clean and declutter
3. Work with a top-performing agent
4. Stage a home office
5. Boost your home’s curb appeal
6. Focus on repairs before renovations
7. Highlight what local buyers want most
Should I sell my California home myself (FSBO)?
What if I need to sell my California house fast?
Bottom line: Should I sell my California house now?
