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What to Expect in California Real Estate in 2026: Opportunities, Shifts, and What Buyers & Sellers Should Prepare For

Russell Enyart
3 days ago
2 min read

California’s real estate market has always been one of the most watched, debated, and influential in the country — and 2026 is gearing up to be a pivotal year. With evolving economic patterns, demographic shifts, and continued demand for lifestyle-driven locations, buyers and sellers alike should prepare for a market that blends both opportunity and competition.

Here’s what you should be looking out for in 2026:

1. A More Balanced Market May Finally Arrive

After years of extreme volatility — from historically low rates in 2020–2021 to sharp increases in 2022–2024 — California is inching closer to stabilization.By 2026, experts anticipate a more balanced market, where neither buyers nor sellers hold overwhelming power.

Expect:

More inventory than the past few years
Softer bidding wars
Slightly more negotiation room

Buyers: This means less pressure and more choices.

Sellers: Pricing correctly and presenting your home well will matter more than ever.

2. Mortgage Rates Predicted to Settle

While exact predictions vary, most forecasts expect mortgage rates to ease somewhat by 2026 as inflation stabilizes and the economy cools into equilibrium.Lower (or at least more stable) rates will:

Bring more first-time buyers back into the market
Encourage move-up buyers previously locked in by high rates
Improve affordability in key metro areas

If you’ve been waiting for a window to buy in California, 2026 might be that door opening.

3. Migration Trends Will Keep Reshaping the Market

The “California exodus” narrative is fading — not disappearing, but shifting. Instead of mass departures, we’re seeing selective migration. High earners and remote workers are returning to desirable areas such as Sacramento, Riverside County, and the Central Valley where their dollar stretches further.

In 2026:

Expect continued growth in outer suburbs and secondary cities
Expect renewed interest in lifestyle markets — coast, wine country, and mountain communities
Expect tech and entertainment hubs to remain competitive, but more price-conscious

These shifts could provide strong opportunities for both investors and buyers focused on long-term value.