Why Zillow and Redfin's 2025 Predictions Miss the Mark for SoCal Real Estate

If you’ve been keeping an eye on Zillow and Redfin’s forecasts for 2025, you’ve probably heard a lot of predictions about home prices, interest rates, and rent hikes. The buzzwords are there: rising interest rates, shifting affordability, and a “softening” of the market. But if we’re being honest, these reports don’t always paint the whole picture—especially when it comes to Southern California’s diverse, ever-changing real estate landscape.

Here’s the thing: those broad market predictions don’t always reflect the unique nuances of local areas. Yes, the market as a whole may seem like it’s cooling down, but that doesn’t mean there aren’t hidden gems out there just waiting to be uncovered. Let’s dive in.

The Big Picture: Zillow vs. Redfin’s 2025 Forecast

Both Zillow and Redfin agree that interest rates will likely remain higher throughout 2025, slowing down buyer demand and keeping home prices somewhat steady. They’re also predicting that inventory won’t bounce back as quickly as we’d hope, keeping supply tight and keeping prices from bottoming out. Zillow suggests a modest increase in home values in 2025, while Redfin anticipates more of a plateau effect, with only slight upward movement in the most desirable markets.

But here’s where it gets interesting: These forecasts largely focus on national averages and don’t capture the local shifts that are happening in Southern California right now—specifically, areas that have always had a unique rhythm, like the Coachella Valley and Ventura County.

The Reality: More Renters, Fewer Buyers (But Also New Opportunities)

Both Zillow and Redfin predict an increase in renters in 2025, and it's pretty clear why. High interest rates and stagnant wage growth are making it harder for first-time buyers to enter the market. This could lead to more people staying put in rental properties longer than expected, which means rental demand will stay strong in certain regions.

But that doesn’t mean there’s no opportunity in homeownership—it just means the game is different. It’s not about the "hot" properties everyone is talking about; it’s about thinking strategically and looking in areas where people aren’t traditionally looking, but should be.

Unconventional Opportunities: Coachella Valley and Ventura County

So let’s talk about what’s not being talked about. Yes, the typical advice is to focus on the luxury markets or the areas everyone is vying for, but there are places in Southern California that are defying these predictions in ways that make them ripe for investment.

Coachella Valley/Palm Springs Area: While Palm Springs has long been a hotspot for second homes and vacation rentals, the surrounding areas like Desert Hot Springs and Indio are gaining momentum. These markets are more affordable, and they’re seeing gradual changes. The value for dollar in places like these is still high, and if you’re willing to put in a little work (think design and renovation), you can unlock substantial long-term returns. Plus, people are flocking to vacation properties again—remote work is still a thing, and some buyers are looking for affordable vacation retreats that are also easy to maintain.

Ventura County: On the opposite side, Ventura County is still an underappreciated gem in SoCal. This area may not have the same glitzy reputation as Santa Barbara or Malibu, but it’s becoming a more viable option for those wanting proximity to the beach without the astronomical price tag. Areas like Oxnard and Camarillo are seeing more interest as affordable, long-term housing options for those who can’t afford to be closer to Los Angeles or Santa Barbara. You also get a lot of space for your dollar here—perfect for those looking for multi-family properties, or a starter home with room to grow.

Why Traditional Predictions Don’t Tell the Whole Story

Here’s why you can’t just look at the national headlines and apply them locally: Southern California real estate is more nuanced than any data algorithm can predict. Local economies, neighborhood-specific developments, and lifestyle shifts all play a huge role in where the opportunities are. Yes, higher interest rates will impact overall buying power, but in these emerging markets, it’s more about finding untapped potential. People want value without compromising lifestyle, and they’re realizing that they can find it in unexpected places.

Final Thoughts: Don’t Follow the Herd

If you’re waiting for the “perfect time” to buy or sell, or for prices to come crashing down—don’t. Real estate isn’t a one-size-fits-all game. While the market may seem stagnant or "soft," there are still areas where you can create real wealth, especially if you’re willing to think outside the box.

In the end, it’s about identifying areas that aren’t on everyone’s radar yet but are on the verge of tipping. Do your research, know what to look for, and build for the long haul. After all, real estate isn’t just about buying properties—it’s about understanding the people, the culture, and the lifestyle behind the investment.

Stay smart, stay ahead, and keep your eyes open for the opportunities others overlook. Your next property might be waiting in the place where no one else is looking yet.

A Note on the LA Wildfires

The recent LA wildfires have brought unexpected shifts to Southern California’s housing market. Beyond the heartbreaking loss of homes, the fires are driving increased demand for temporary housing in surrounding regions like Ventura and Orange Counties, the Inland Empire, and the Coachella Valley. In the long term, we may see buyers prioritize properties in less fire-prone areas or those designed with disaster resilience in mind. Inventory challenges in affected areas could also push prices higher in neighboring markets as displaced families look for new homes. These events highlight just how quickly local dynamics can reshape real estate trends.