House the market? Scherb Homes Group - May 2026
South Bay & California Market Update: What Buyers and Sellers Need to Know Right Now
The real estate market is shifting — but not in the simplistic “up or down” way many headlines suggest.
As agents, buyers, and sellers, it’s critical to focus on signal over noise.
Our recent market analysis highlights that today’s market is no longer driven solely by mortgage rates. Instead, it’s shaped by a broader set of factors including inventory levels, buyer confidence, pricing strategy, market velocity, concessions, contract fallout, and local supply-demand dynamics. In short: the market is more nuanced, and success requires sharper strategy than ever before.
The Big Picture for California
California — particularly Southern California — is currently moving from a balanced market into a stronger seller-favorable environment.
Key statewide indicators:
Only 18% of listings are requiring price reductions (well below the national balanced-market norm of 33%)
Inventory remains tight at just 2.7 months of supply
Average sale-to-list price ratio is 98.9%
Pending-to-new listing ratio sits at 0.82
Contract cancellations are exceptionally low at just 2%
Average listings are receiving 1.8 offers
This means buyers are still active, competition remains healthy, and sellers who price strategically are often seeing strong results.
What This Means for Sellers
For sellers, the opportunity remains strong — but pricing strategy matters more than ever.
Many homeowners are still “testing” the market with aggressive pricing, which is why some luxury markets like Manhattan Beach are seeing 33–35% of listings adjust pricing. However, that does not automatically indicate weakness; rather, it often reflects sellers pushing for maximum value while buyers determine where true market acceptance lies.
Seller Takeaways:
Well-priced homes continue to attract strong attention
The first two weeks on market remain the most critical
Strategic pricing is outperforming aspirational pricing
Buyers are selective, but highly motivated for quality inventory
Proper preparation, marketing, and negotiation remain essential
What This Means for Buyers
For buyers, this market still offers opportunities — but preparation is everything.
While competition remains real, buyers are benefiting from:
Slightly more inventory than peak frenzy periods
More negotiation leverage than during ultra-competitive pandemic years
Creative financing tools like fixed-rate second mortgages
Better opportunities to secure homes before broader market acceleration
Buyers should:
Keep pre-approvals updated frequently
Build flexibility into financing strategies
Monitor neighborhood-specific trends, not just broad headlines
Move decisively on well-positioned properties
My Advice as Your South Bay Advisor
Whether you’re buying or selling, local expertise matters more than ever.
The broader California market may be strengthening, but hyperlocal neighborhoods like Palos Verdes, Redondo Beach, Hermosa Beach, and Manhattan Beach all behave differently.
Success in this market depends on understanding:
Buyer behavior
Pricing psychology
Inventory pressure
Contract friction
Financing shifts
Neighborhood-specific trends
The bottom line:
We are currently in a market that still favors sellers, but informed buyers can absolutely succeed with the right strategy.
For sellers, now remains an excellent time to capitalize — especially before inventory meaningfully rises.
For buyers, opportunities still exist, but being prepared, informed, and decisive is crucial.
As always, my role is to help you interpret the market clearly, eliminate the noise, and position you to make the smartest move possible.
If you’re curious about your home’s value, considering a move, or simply want to better understand your options in today’s market, I’m always here to help.
— Cliff
