Will real estate get better in 2026 for sellers?
If you pay close attention to the market you’d have notice that 2025 was a slow time, and a hard for sellers. Most homes were having price reductions, sitting on the market, and not even selling. This market was the complete opposite of what we saw just four years ago during covid, when houses were flying off the shelves and anyone with a pulse could sell their home above asking price. So the big question for sellers who are on the fence about selling is whether or not real estate will get better in 2026. Let’s go over everything you’ll have to know about the chances of this market turning for the better.
The housing market in 2025...
2025 was notoriously known for being an incredibly hard time to sell a home. We saw many things that affected home prices negatively. Recent fires have also decreased buyer demand, which ultimately led to an imbalance in the market. Sellers were trying to sell for top of the market Covid prices, when buyers were already getting out of the market prematurely.
In LA county specifically, we saw nearly 40% of listed homes not sell. This is the most amount of unsold inventory we’ve seen for a while, as the 5 year average lingers around 27%. This decrease in buyer demand also had drastic affects to home values, with the median LA home value dropping around 1.7% from 2024. But it’s not just the homes that are losing value, houses that are listed for sale are seeing multiple price reductions. Nearly 38% of the listing homes for sale had at least one price reduction before selling. Price reductions also mean longer days on market before selling. The median days on market was around 62 days, nearly 8% up from last year. To say the very least, most sellers that had to sell in 2025 either did so for specific situations or because they had a better investment in mind. It was not the year to cash out on high equity gains.
New Things Happening in 2026
The biggest and most notable change happening in 2026 is the potential for a new Fed chair, Kevin Warsh. The position is currently held by Jerome Powell, who has been steadily lowering interest rates and responsible for the steady decline of mortgage rates. There is a lot of uncertainty as to how this change in position will affect the housing market. As Fed chair, Kevin Warsh has a lot of decisioning power and whether he uses this tactifully or abuses it is not yet known. For the most part however, if things continue at this rate, economists predict that there will be no radical drop in mortgage rates anytime soon.
The Dream for All program is happening again in 2026, this is a government funded program that helps first time generational homebuyers with a massive 20% downpayment. This is done in a lottery style in order to be fair to the public. While many buyers miss out on this program because of this lottery system, it encourages a lot of buyers to get into the market. This increase in buyers, especially in local markets, has the potential to artificially increase demand and prices.
Fannie & Freddie have been making changes to the way they pre-qualify homebuyers. Now eliminating the set credit score requirement, this allows for a lot of buyers to be able to receive a pre-approval letter when previously it was impossible. By becoming more lenient in this process, they expect more buyers to get into the market. Which of course, will inflate prices and hopefully drive the market back to the appreciation trajectory we’ve seen in previous years.
My 2026 real estate prediction for sellers
However despite all of these exciting changes, the market is not expecting any big moves. In fact the market is not expecting any big changes for sellers for the next 2-3 years as interest rates stabilize. For the most part, mortgage rates are going to be about the same range of 5.5%-6.5%. Housing prices are expected to increase slightly, my best guess is around 1% yearly, but nothing is going to be skyrocketed anytime soon.
Of course all markets are technically different and local markets may see different outcomes, but for the general LA county the market is going to be about the same as 2025, just slightly better if anything.
So the next big question is what will need to happen in order for the market to rebound and get back into the state it was during Covid. There is really only 2 scenarios that this can happen, one is to wait out 2-3 years for rates to come down and for the economy to stabilize, the other is having a massive drop in mortgage rates, which has lots of other economic demerits to account for. For these 2 reasons, nobody is expecting the market to get any better for sellers anytime soon. It’s a waiting game, but with real estate you generally are going to be winning in the long run, even if this short period of a couple of years seems hard.
FAQs
Why was 2025 bad for sellers?
The reason why 2025 was such a bad time for most sellers was because of affordability issues for buyers. Rates were high, but sellers were also expecting/listing their homes very high. This combination of high prices + high mortgage rates led to a sharp decline in buyer demand, which naturally creates a bad market for sellers.
Will the housing market crash in 2026?
The short answer is no. The housing market typically will not crash unless something sudden and detrimental happens in the market. The possibility isn’t 0%. However since most crashes occur from sudden impacts on the market, like the crash of 2008, there really is no way to predict when another crash is coming, if any at all.
What do I do if I want to sell my house in 2026?
It all starts with research! The first thing you should do is to speak with a realtor about your situation. You’ll gain all sorts of valuable information such as how much money you can expect to sell for, how the market is doing, and most importantly you’ll be more equipped to determine whether or not selling makes sense for your family.
📍 Final Thoughts from a Local Realtor
As great as it is knowing how the market will react for sellers in 2026, that doesn’t necessarily mean it applies to you and your home…
This is because the ‘housing market’ is different for every city and every neighborhood. Here is a great example, the rest of the market may be declining in value, however coastal homes and homes in Beverly Hills continue to gain appreciation and sell quickly. This is because housing markets depend on local location and data.
The only way to truly know if your home in your city is a good fit to sell in 2026 is to do your research! Or simply put, speak to a realtor that can inform you on how your market is doing at the moment. It’s all about getting local information from a local professional, that’s the true best way to determine if you should consider selling in 2026.
Have questions about specific neighborhoods, I’d love to help.
