📢 Randy Zimnoch's 🏠 Predictions for next couple months and 1st Quarter Recap of the Real Estate Market
- RealtyNational
- Jun 2
- 9 min read
Now, my quick life update before my market update (if you are not interested in my life shenanigans, scroll down to the good stuff below).
In the 1st quarter, we celebrated my wife's birthday in January and one of the days, we took our kiddos to get some super cool donuts. I took a trip to Jacksonville, FL to visit my friend Greg Cohen, who is literally building skyscrapers in downtown Jacksonville right now. Pretty sick! and lastly, my parents visited us, which is always a treat to spend time with them, while they also get to goof off with their grand kids.
Now let's get into the market updates
LOOKING BACK AT QUARTER 1:
The first quarter started stronger than many expected.
Buyer demand picked up quickly in January and February, with weekly pending sales running noticeably higher than the same time last year.
Inventory was still increasing, but at a much slower pace than we saw last year, which helped keep the market tighter than many buyers probably hoped for.
The market overall felt much more competitive in Q1 than most people anticipated heading into 2026.
The biggest story in Q1 was the continued split between detached vs. attached housing.
Detached homes held up much better. In March, the detached median price was $1,100,000, up 2.4% year over year.
Median detached price per square foot was $611, up about 1% year over year.
Attached homes continued to underperform. The attached median price was $670,000, down 1.1% year over year.
Median attached price per square foot was $564, down 2.76% year over year.
That divergence is important.
Detached housing is still being supported by lower inventory and stronger buyer preference.
Attached housing, especially condos, continues to face more pressure from:
affordability,
HOA costs,
insurance concerns,
and buyers questioning whether the ownership experience is worth the premium over renting.
Inventory was another major story.
Detached inventory in March was down over 21% compared to last year.
Low supply continues to be the strongest support for home values.
Attached inventory was actually up slightly compared to last year, which helps explain why attached housing is not performing as well.
Mortgage rates were the wild card.
We started the year with rates looking more favorable than last year.
At one point, rates briefly broke below 6%, which helped buyer activity pick up.
By the second half of March, rates moved back above 6.5%, and that started testing buyer demand again.
By the end of March, weekly pending sales started softening, showing buyers are still extremely payment sensitive.
LOOKING INTO QUARTER 2 AND SLIGHTLY BEYOND:
Q2 has already started more mixed than Q1.
The market is not weak, but it has already started feeling less aggressive than it did in February and early March.
Inventory has already moved above 6,000 homes, which is seasonally normal, but still important.
More options usually means buyers become more selective, and sellers who are overpriced start sitting longer.
Price reductions are also rising.
That tells me some sellers are overshooting the market.
That does not mean values are crashing.
It means the market is becoming more normal and more price sensitive.
The best listings are still moving.
Properly priced homes in desirable areas are still seeing strong activity.
The overpriced listings are not.
That is becoming one of the biggest differences in today’s market.
Detached homes should continue to outperform attached homes.
Detached inventory remains relatively tight in many desirable neighborhoods.
Attached homes will likely continue to face more pressure unless they are:
priced very well,
have reasonable HOA costs,
and do not have major insurance or special assessment concerns.
Mortgage rates remain the biggest factor to watch.
The bond market has been flashing some warning signs.
If rates stay elevated or move higher, demand will likely cool further heading into summer.
If rates improve, buyers could re-engage quickly because many are still sitting on the sidelines waiting for a better payment.
So far, Q2 has remained active, but the market has clearly become more uneven.
May has already started showing signs of slowing compared to February and March.
I would not be surprised if that continues into June.
I also think Q3 could create better opportunities for buyers, especially with sellers who listed too high in spring and are still sitting by summer.
STRATEGIES FOR SELLERS:
Pricing correctly matters more now than it did earlier in the year.
In February and March, sellers had more room to push because demand was stronger and inventory was lower.
Now, with inventory rising and price reductions increasing, buyers have more choices.
That means sellers need to be much more careful with pricing strategy.
I still like the strategy of pricing slightly below market value to create attention.
This tends to generate:
more eyeballs,
more showings,
and stronger negotiating leverage.
This strategy works especially well if the property:
shows well,
is marketed properly,
and is located in a desirable area.
Since CA MLS allows ranges, using the bottom number of the desired range as the list price and mentioning the range in the public remarks can still be a smart strategy.
This helps increase visibility in buyer searches.
It can also help create urgency and drive offers into the desired range.
If you are selling an attached property, pricing becomes even more important.
Buyers are much more sensitive right now to:
HOA fees,
insurance concerns,
and monthly payment shock.
I would also be more open to concessions than I was earlier in Q1.
That does not mean giving money away.
It means using concessions strategically if they help the buyer feel comfortable enough to move forward.
I still recommend offering to pay the buyer’s agent commission that is requested in the contract.
Many buyers simply do not have extra cash to pay their agent on top of:
down payment,
closing costs,
and reserves.
However, if the offer comes in lower than expected and includes a large buyer agent commission request, we can always counter both the price and commission structure.
Assumable loans are still an important strategy to watch.
If you have an FHA or VA loan with a very low interest rate, your loan may be assumable by the buyer.
That can become a major marketing advantage in today’s rate environment.
There are many caveats to these transactions, so reach out if you want to discuss whether your property may qualify.
If a property sits too long, I still like the strategy of canceling and relisting as new.
Especially around the 45-day mark.
I also like:
changing the main photo,
rearranging photos,
improving staging,
possibly adding virtual staging,
and adjusting pricing if needed.
Sometimes a listing simply needs to feel “new” again to buyers.
STRATEGIES FOR BUYERS:
Buyers have a little more leverage than they had earlier in the year, but not across the board.
If a detached home is priced well in a desirable area, do not assume you can steal it.
Those homes can still attract strong activity and multiple interested buyers.
Where buyers have the most leverage:
Properties that have been sitting.
Attached homes with higher HOA costs.
Homes needing work.
Sellers who listed too aggressively in spring.
If you are a buyer, pay close attention to:
Days on market.
Price reductions.
Seller motivation.
Whether a property has already fallen out of escrow.
That is where the best negotiation opportunities usually show up.
July through September could become a better buying window than spring.
Especially if inventory continues climbing and more sellers become tired of sitting.
October through January usually creates even better pricing opportunities, but inventory options typically become more limited.
If you find a home that checks most of your boxes and the price makes sense, do not overplay your hand just because the market is less aggressive than earlier this year.
However, if a property:
has been sitting,
already had a price reduction,
or clearly missed the market,
that is where buyers may be able to negotiate on:
price,
credits,
repairs,
or terms.
Assumable loans can also create unique opportunities for buyers.
They are not common.
Many require a large cash gap between the loan balance and purchase price.
But when the numbers work, they can be extremely powerful in this rate environment.
FINAL THOUGHTS:
Q1 was stronger than expected.
Q2 has already become more balanced.
Detached homes are still holding up relatively well because inventory remains tight.
Attached homes are still facing more headwinds.
Mortgage rates remain the biggest variable.
The market is not collapsing, but it is becoming more selective.
For sellers, pricing strategy matters.
For buyers, patience and timing matter.
For investors, caution matters, especially if your exit strategy depends on selling into the summer or fall market.
And as always, If you are planning on relocating to another state, let me know as I can help locate a great agent in whatever city that you are planning to move to. I will actually identify a couple great agents there, interview them on your behalf and connect you to that agent once I feel like he or she can serve you as I would here. (Bonus: I would stay involved over-seeing your purchase transaction on top of it for you and consult you along the way. That's if you value my opinion, of course.)
IF YOU OWN A HOUSE OR RENTAL OR KNOW SOMEONE THAT DOES:
NEW CALIFORNIA REAL ESTATE LAWS FOR 2026:
California's real estate landscape in 2026 is shaped by significant new mandates that prioritize tenant rights, listing transparency, and housing density. Key laws include a new "habitability" requirement for appliances and strict rules for AI-edited property photos.
Tenant & Landlord Regulations
Mandatory Appliances (AB 628): Starting January 1, 2026, working stoves and refrigerators are considered essential for "habitability". Landlords must provide and maintain them in all new or renewed leases. Tenants may opt out in writing to use their own appliances.
Security Deposit Updates (AB 414): Landlords must return security deposits electronically if requested by the tenant and allow for alternative return arrangements. For leases starting after July 1, 2025, landlords must take move-in/move-out photos to document any deductions.
Social Security Defense (AB 246): Provides an affirmative eviction defense for tenants whose rent nonpayment is directly caused by delayed Social Security benefits.
Bulk Internet Opt-Out (AB 1414): Tenants can opt out of mandatory bulk internet or cable packages and deduct those costs from their rent if forced.
Home Sales & Marketing
AI Photo Disclosure (AB 723): Effective January 1, 2026, any listing photo that has been digitally altered or AI-generated (beyond basic lighting or cropping) must include a clear disclosure and a link/QR code to the original, unedited image.
Thirdhand Smoke Disclosure (AB 455): Sellers must disclose any known tobacco or nicotine residue (including from vaping) inside a home. Failure to disclose can give buyers a right to cancel the purchase.
Gas Appliance Replacement (SB 382): Sellers must disclose state or local requirements regarding the future replacement of gas-powered appliances with electric ones.
Federal "FinCEN" Reporting: Beginning March 1, 2026, all-cash purchases of residential property by legal entities or trusts must be reported to the federal Financial Crimes Enforcement Network to combat money laundering.
Development & Wildfire Safety
Transit-Oriented Density (SB 79): Effective July 1, 2026, this law overrides local zoning to allow denser, taller housing (up to 75 feet) within half a mile of major transit hubs.
Wildfire Recovery Protections (AB 851): Prohibits unsolicited purchase offers in fire-affected ZIP codes in Los Angeles and Ventura counties through 2027 to prevent predatory practices.
Ember-Resistant Zones (AB 1455): Requires a 5-foot "Zone 0" buffer around homes in high-risk areas to be free of combustible materials.
HOA & Construction Changes
HOA Fine Caps (AB 130): General HOA fines are capped at $100 per violation unless they pose a direct health or safety risk.
Private Plan Review (AB 253): If a local building department takes more than 30 days to review building plans, homeowners may hire private, certified reviewers at their own expense to speed up the process.
INFORMATION PREVIOUSLY PROVIDED IN MY REPORTS:
Big Beautiful Bill Act
As it relates to real estate, the Big Beautiful Bill Act reinstates and makes permanent the mortgage insurance premium deduction, which can help homeowner with low down payments: READ MORE HERE
The bill temporarily increases the state and local tax (SALT) deduction cap from $10,000 to $40,000, potentially benefiting homeowners in high-tax states: READ MORE HERE
The bill makes permanent the 100% first-year bonus depreciation deduction for qualified property acquired and placed in service after January 19, 2025. READ MORE HERE
Short Term Rental Laws officially came into Effect on May 1st, 2023
There are still licenses available contrary to what most would expect!
To View All STR Regulations for the City of San Diego or to apply for a license, Click Here
OTHER USEFUL RESOURCES:
Have you ever wondered what you might be able to additionally build on your property?
Search and discover what is possible on any property. Browse property and permit details. Apply for permits and rebates. Learn if an ADU is possible
Are your electric bills out of control? If so, consider installing solar panels like many of our clients have. Reply to this email and I will connect you with a couple trusted solar contacts so you can compare prices and service.
Let me know if you have anything specific that you want to discuss with my team and I. We are here to help you navigate through it all and yes, I would love it if you can refer me to anyone that is thinking about buying or selling in Southern California. Thank you in advance!
Wishing you an strong finish to quarter 2!
p.s. Thank you to Alicia for these kind words and for trusting us with the purchase of her home!
