A couple of years after the Mortgage Meltdown of 2008, homeowners who lost their homes were unable to buy because their credit was severely damaged by foreclosures, bankruptcies, and short sales, which remained on their credit report for 7-10 years. Moving forward, let’s examine the 2025 home-buying journey for Californians, transitioning from a low market to a high market.

Historical Home Buying: A couple of years after the 2008 crash, in 2010, the Millennials emerged, and on-the-fence homebuyers began to enter the real estate market. Those who saw the opportunity and embraced it were making history. Not because workers were earning more money, but because the earnings of average working people were meeting the lower post-mortgage meltdown prices.

The Low-Low Market: It was a once-in-a-lifetime economic opportunity, with both prices and mortgage interest rates at historically low levels. In 2010, the Average 30-year mortgage rate was around 4.78% the lowest rate in 70 years. At the same time, the average 2010 home price in California was $280,000. So, I referred to this historical time as the Low-Low Market.

High-Low Balance: In the past, the high-low balance, as seen during the early 1980s when interest rates peaked at 21%, is characterized by high interest rates and low prices. For example, juxtaposed to those rates, a two-bedroom house in Mill Valley, CA, has an asking price of $150,000. As a result of the exorbitantly high interest rates, lower prices were balanced against higher rates; imagine what your monthly payments would be on a mortgage at 21% interest, for example, at $150,000. it would be almost $3000. a month in 1980.

Your Interest from 2010 to COVID to 2025: Again, in 2010, the average interest rates were 4.78%. Then, we had the pandemic years of 2020-2021, during which interest rates were historically and incredibly low, at 3% in 2020, dropping to 2.96% in 2021. According to Bankrate, “as of Thursday, August 07, 2025, current interest rates in California are 6.61% for a 30-year fixed mortgage and 5.86% for a 15-year fixed mortgage.”

Inflation the Silent Train: What is the 3rd cause hindering first-time buyers from coming on board with the homeownership train and impacting real estate sales? It’s inflation! You see, the average price of a single-family home in California in 2010 was $280,000. By comparison, the average price in 2025 for a single-family home in California is around $900,000, that’s a wopping 221.43% increase in a decade and a half.

Yearnings for More Earnings: The forthcoming discussion will illustrate why workers are yearning for more earnings. The average income in 2010 was around $57,000. And fifteen years later, the average yearly income for Californians is, hold it, hold it, drum roll please, a little over $68,000 —a mere 20% increase of $11,000, which translates to a paltry $733.33 yearly increase spanning over fifteen years.

The High-High-High Market Pulls Into Inflation Station: Not a train everybody can board. So the third high in this High-High-High Market is caused by inflation. Again, in California, the 2010 average income was $57,000, the average home price was $280,000, and the average interest rate was 4.7%. However, in 2025, the average income is $68,000, the average home price is $900,000, and the average interest rate has increased by only 1.73% to 6.43%. I liken the preceding to having $900,000 pound train, trying to be pulled with 6.43% horsepower, and only 20% in the earnings fuel tank.

Low-Wage, High-Price Issues: Please Pass the Tissues. After 15 years, earnings have increased by only 20%, up $11,000, and interest rates have risen by 1.66%. Notably, this is in comparison to the rates in 2010. However, the third most significant factor that has left many people on the home-buying platform is inflation, with an average home cost of $280,000 in 2010 compared to $900,000 in 2025, resulting in a 221.43% increase. The 1.66% interest rate difference over 15 years is nominal. What I see as the real issues causing homebuying boo-hoo tissues are what appears to be wage stagnation, juxtaposed with inflation. This is causing many buyers to be disqualified! As a result, you have what I call the High-High-High Market, characterized by stagnant earnings, interest rates higher than those in 2010, and high inflation, leading to higher prices.

Bad News Bears Creative Opportunity: As you can see, your wage is insufficient to compete with inflation. You will never be able to save quickly enough to keep pace with the rate of inflation. Being a creative thinking Real Estate Broker with 23 years of successful negotiating in-the-trenches transactions. I continually seek solutions to rise above the noise pollution and help people achieve their homeownership goals. Every real estate market presents opportunities; you must be creative. Individuals may not be able to afford to buy on their own, and even wage-earning couples may struggle to do so. However, if you join forces with three or four more people, it could be an extended or multi-generational family, like-minded friends, or investment partners. Owning is still better than moaning as a renter. You gain appreciation, deductible benefits, and housing stability (you don’t have to keep moving or worry about rent increases every year).

A No-Insult Consult: I’m Here For You. If you are ready to buy or need help (behind on house payments, probates, or short sales), please call me to discuss your options. You will never feel insult by my consult, for I am here to help! Sellers, this information enables you to understand why buyers have become more discerning and are willing to wait for a reasonable price. It also explains why your homes are lingering as stale listings, marked by longer Days on Market (DOM) and lower-than-asking-price offers. In light of recent market developments, I am here to help. You are welcome to call me for a free consultation, and together, we can embrace the market conditions and rise above, with faith, hope, and love.

Sincerity Realty® “A Sincere Voice For Your Real Estate Choice.” My brokerage embodies a client-first approach to real estate, led by a 23-year veteran who brings transparency, integrity, and care to every transaction, ready and willing to take action.

Thank you, Mary Ann Cadorna, Sincerity Realty® DRE 01345274. The Low-Low Market vs. The High-High-High Market by Mary Ann Cadorna © August 7, 2025 for San Fran Mary Ann’s Horse Sensical Quotes and Anecdotes.

Disclaimer: Some of the Information is deemed reliable but not guaranteed. The information and the opinion of the author provided in this newsletter are for general informational and or entertainment purposes only and do not constitute professional advice. Readers should consult with qualified professionals for advice tailored to their specific needs.