LOS Angeles Real Estate Market Momentum & POSSIBLE FED RATE CUT

Sales activity is gaining steady momentum across Los Angeles, with both the city and county seeing year-over-year increases in closed transactions, according to data from Fidelity National Title. June sales volume increased with inventory gains giving buyers more options—yet demand remains elevated, especially in premium segments.

Luxury Demand Fueled by Rebuilding and Relocation

Overall sales have risen across the board, but much of the surge in the luxury market can be traced to displaced homeowners from the recent Palisades fires. Many are actively seeking new homes rather than long-term leases..  As a result, areas like Brentwood, North of Montana in Santa Monica, Little Holmby, and Mar Vista have seen an uptick in sales at premium prices.

LRegional Snapshot: Market Strength by Neighborhood

(Data from Q2 2025, Fidelity National Title)

This upward trend reflected in data below showing robust sales activity across key Westside markets. These results also reflect renewed confidence among buyers, supported by the prospect of improving economic conditions and easing interest rates.

Los Angeles County single-family residence sales rose
• Q1 2025: +15.23% (vs. Q1 2024)

• Brentwood
  - 83 sales | Avg. price: $5.55M | High: $30M
  - Avg. $/sqft: $1,534

• Santa Monica (North of Montana)
  - 79 sales | Avg. price: $5.03M | High: $14.55M
  - Avg. $/sqft: $2,197

• Westwood / Rancho Park (90024 & 90025)
  - 29 sales | Avg. price: $2.62M | High: $7.99M
  - Avg. $/sqft: $1,215

• Mar Vista
  - 96 sales | Avg. price: $2.39M | High: $6.75M
  - Avg. $/sqft: $1,516

• Cheviot Hills
  - 11 sales | Avg. price: $3.79M | High: $8.5M
  - Avg. $/sqft: $1,445

Optimism Around Interest Rates—and How It Could Fuel Buyer Activity

Recent commentary from Goldman Sachs points to a more favorable trajectory for interest rates, which could bring renewed momentum to the housing market by fall. Several key factors are behind this revised outlook:

1. Tariff Impacts More Contained Than Expected
   - Despite early fears, tariffs have not caused a broad surge in consumer prices. Many companies have adjusted supply chains or absorbed costs to limit inflation.

2. Stronger Disinflationary Forces
   - Technology gains, improved productivity, and shifting consumer behavior are helping slow inflation without undercutting economic growth.

3. Labor Market Softening Beneath the Surface
   - Although top-line employment data remains strong, a drop in job openings and a slower hiring pace signal an easing labor market—encouraging the Fed to consider easing policy.

What to Watch: Fed Policy and Buyer Psychology

1. September Rate Cut on the Table
   - Market signals and Fed minutes suggest growing openness to a rate cut as early as September, provided inflation continues to moderate.

2. Balancing Political Pressure and Economic Data
- While political momentum for cuts is building, the Fed remains focused on hard data—especially inflation and employment.

3. Tariffs Still a Wildcard
   - New trade tensions could alter Fed’s path if import costs begin to push inflation upward again.

What This Means for Buyers & Sellers

If the Fed moves forward with a September rate cut, we could see a meaningful impact on both affordability and buyer demand:

For Buyers:
• Lower borrowing costs and improved affordability
• Expanded purchasing power, especially in mid-tier and luxury markets
• More competition, particularly among buyers who’ve been waiting on the sidelines

For Sellers:
• Strategic pricing will remain key as buyers are still rate-sensitive
• Turnkey homes will continue to perform well, especially in premium neighborhoods
• Luxury properties may see increased attention from both displaced homeowners and buyers responding to rate shifts

As we enter the second half of 2025, the convergence of local recovery, economic easing, and shifting buyer motivation is creating a dynamic market environment. Staying ahead of these trends will be critical—whether you’re planning to buy, sell, or simply watch the market evolve.
*All market data sourced from Fidelity National Title, Q2 2025.*

Sources & Further Reading

Goldman Sachs Forecast & Analysis: https://www.noradarealestate.com/blog/interest-rates-predictions-for-the-next-2-years-by-goldman-sachs/

Barron’s: June Minutes Point to Divided Federal Reserve: https://www.barrons.com/articles/fed-meeting-june-interest-rates-cut-5391c409

MarketWatch: What Will It Take for the Fed to Cut Rates?: https://www.marketwatch.com/story/what-will-it-take-for-the-fed-to-cut-rates-in-september-look-here-for-clues-77dd2770

MarketWatch: September Rate Cut Odds Rise: https://www.marketwatch.com/story/the-odds-of-a-september-fed-rate-cut-look-high-after-june-jobs-report-but-it-may-be-a-tough-call-for-powell-cca97e58

Freddie Mac PMMS Data: https://www.freddiemac.com/pmms