The California real estate market in 2025 is navigating significant shifts driven by changing buyer preferences, increasing affordability challenges, and a growing reliance on technology. As homebuyers increasingly demand homes with greater energy efficiency, smart home technology, and green features, realtors in the state are being forced to adapt to a new set of expectations and market dynamics. This transformation is not only reshaping the way realtors do business but also influencing the strategies employed by both buyers and sellers.
Shifting Buyer Preferences
In 2025, the California housing market remains one of the most competitive in the country, with home prices continuing to soar, particularly in Los Angeles, San Francisco, and San Diego. However, affordability has become a growing concern. In response, many homebuyers are moving away from urban cores in favor of suburban and rural areas where housing is more affordable. In particular, cities like Bakersfield, Riverside, and Temecula have seen a significant uptick in demand as remote work becomes a permanent fixture for many employees.
While millennial buyers have been the driving force behind this shift, the demand for suburban homes is also being fueled by the ongoing pandemic-driven desire for more space—specifically more bedrooms for home offices and yards for outdoor recreation. According to the National Association of Realtors (NAR), millennials made up over 40% of all homebuyers in California in 2025, and this trend is expected to continue.
In particular, first-time homebuyers in California are increasingly looking for energy-efficient homes that offer long-term savings on utilities. This trend is not only driven by the state’s growing focus on sustainability but also by the rising costs of living, where energy bills play a significant role in monthly expenses.
The Role of Smart Home Features
Another emerging trend in 2025 is the increasing demand for smart home technology. As part of their search for homes, buyers are now prioritizing home automation systems, including smart thermostats, security systems, lighting, and appliance control. This demand has been fueled by the growing interest in tech solutions that improve efficiency and security, as well as enhance convenience.
As realtors, it has become critical to stay updated on the latest smart home technologies to meet the needs of tech-savvy buyers. From voice-activated assistants like Amazon Alexa to solar-powered systems that reduce energy consumption, homebuyers are increasingly interested in properties that integrate these features. Realtors who can demonstrate how a home is equipped with IoT (Internet of Things) technology or how it can be easily converted into a smart home are gaining an edge in this highly competitive market.
The Impact of Technology on Real Estate Transactions
In response to changing buyer demands, real estate agents are also incorporating more digital tools into their workflows. Virtual home tours, which became a necessity during the pandemic, have now become a standard practice. According to Zillow, over 50% of buyers in California used virtual tours before purchasing a home in 2025, a trend that is expected to continue in the coming years.
Real estate professionals are also relying on AI-powered tools for more effective market analysis, personalized property recommendations, and more accurate property valuations. AI tools can predict the market trends and offer targeted recommendations to buyers based on their preferences, making real estate transactions more efficient.
Additionally, many real estate firms are using blockchain technology for transactions. Blockchain’s transparency and security features make it an increasingly attractive option for digital real estate transactions, streamlining the closing process and reducing costs.
Changing Strategies for Sellers
In 2025, the traditional model for selling homes is being challenged by an increased demand for speed and transparency. Sellers are now seeking to close deals faster and are increasingly turning to iBuyers—companies that use technology to quickly purchase homes at competitive prices without the hassle of traditional listing and showing.
Realtors must adapt by educating clients about these alternative selling options while offering their traditional services, which can still provide more personalized experiences. Understanding how to work with iBuyers and navigating the benefits and drawbacks of these services has become part of the realtor’s skill set.
Looking Ahead: Adapting to a Changing Landscape
As the California real estate market continues to evolve in 2025, realtors will need to stay ahead of emerging trends in buyer preferences, smart home technology, and market dynamics. Success will hinge on adaptability, digital proficiency, and a deep understanding of the shifting landscape.
Moreover, diversifying their services to include virtual tours, blockchain transactions, and smart home expertise will allow realtors to remain competitive in a market that is being transformed by technology and consumer behavior.
