Global real estate continues to hold its place as the world’s largest store of wealth, according to a report by Savills. Valued at $393.3 trillion and covering residential, commercial, and agricultural property, it is roughly four times the size of global GDP. For ultra-high-net-worth investors, real estate remains a cornerstone of stable wealth in 2025.

Savills’ report reveals real estate exceeds the combined value of equities, debt and gold. To put this into perspective, all the gold ever mined, estimated at $20.2 trillion, accounts for just over 5% of global property value. Prime real estate offers exposure to an asset class far larger and more tangible than any other. The total value of global real estate has also kept pace with global GDP growth since 2019.

Despite the glowing numbers, global real estate saw a slight annual decline of 0.5% in 2024, driven by a fall in residential property values. While most countries experienced rising prices and new developments, falling values in China pulled down the global average. For investors, this serves as a reminder that even in the world’s largest asset class, regional risks matter and careful market selection remains key.

Commercial property – supported by new developments and stabilising markets – performed stronger, rising 4.1% to $58.5 trillion. The United States benefited from increased investment in manufacturing as companies onshore production. Agricultural land also saw solid growth, helped by constrained supply, population growth, and higher per capita food consumption. These trends suggest where investors might find not only growth but resilient assets that can withstand broader market fluctuations.

Paul Tostevin, head of Savills World Research, said: ‘While the pace of growth may vary across sectors and geographies, real estate’s long-term fundamentals remain strong. It is a store of wealth, a driver of economic growth and its ability to reflect global economic shifts ensures continued relevance in an evolving landscape. Long-term real estate’s position as the world’s most valuable asset class looks set to remain.’

China is the world’s largest real estate market, representing 23.5% of global value, followed by the United States at 20.7%. Together with Japan, Germany, the UK, France, Canada, Australia, South Korea, and Italy, the top ten markets account for 71% of global real estate value, highlighting where the majority of property wealth is concentrated.

Across residential, commercial and agricultural sectors, property continues to provide security and growth potential in a complex global economy.

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The California housing market in 2026 is shaping up to be a year of modest growth and slightly improved affordability. While we won’t see the rapid surges of years past, expect a gentle uptick in home sales and a record-breaking median price that hints at a market finding its footing after more challenging times.

I’ve seen cycles come and go. It’s always tempting to focus on the dramatic swings, but sometimes the most insightful observations come from understanding the subtle shifts. The California Association of Realtors (C.A.R.) latest forecast for 2026 offers a glimpse into a market that’s stabilizing, and for many, that stability is actually good news.

California Housing Market Forecast for the Next Year: 2026 Predictions

Sales on the Upswing, But Don’t Expect a Frenzy

According to C.A.R., we’re looking at an increase of about 2 percent in existing, single-family home sales in 2026. This means an estimated 274,400 units could change hands. This might not sound like headline-grabbing news, especially when you compare it to the booming sales numbers of a few years ago. However, it’s a welcome step up from the projected 269,000 sales for 2025, which itself is a slight dip from the 269,200 homes sold in 2024.

Think of it like this: the market has been catching its breath. After a period of intense activity, it’s natural for things to calm down a bit. This projected increase in sales in 2026 signifies a gradual return to normalcy, rather than a mad dash. For buyers who have been priced out or overwhelmed by competition, this could mean more options and a slightly less frantic search.

A New Price Record, But At a Slower Pace

Here’s a fact that will likely grab attention: California’s median home price is forecast to hit a new projected record of $905,000 in 2026. This represents a 3.6 percent increase from the projected $873,900 in 2025. It’s important to remember that this follows a more modest 1 percent rise in 2025 from the $865,400 median price in 2024.

Now, I know what some of you might be thinking: “More expensive? Great!” But it’s crucial to dig a little deeper. This 3.6 percent growth is significantly slower than the double-digit increases we’ve witnessed in some prior years. This is a key indicator that the market is moving away from rapid appreciation and towards a more sustainable growth pattern. As C.A.R. President Heather Ozur mentioned, “Home prices in California are expected to rise in 2026, but the growth pace will remain mild when compared to rates we’ve seen in past years.” This is a message of moderation, not runaway inflation.

Improved Affordability: A Breath of Fresh Air

One of the most encouraging pieces of the 2026 forecast is the projected increase in housing affordability. We’re looking at the Housing Affordability Index inching up to 18 percent in 2026, from a projected 17 percent in 2025, and 16 percent in 2024.

What does this mean for the average Californian? It means a slightly larger percentage of households will be able to afford to buy a median-priced home. This improvement is largely driven by a projected decrease in mortgage interest rates. C.A.R. forecasts the average 30-year, fixed mortgage rate to dip to 6.0 percent in 2026, down from 6.6 percent in 2025. While these rates are still higher than the pre-pandemic era, they represent a significant improvement from recent years and are well below the long-term average of nearly 8 percent. Lower interest rates, combined with a slight uptick in inventory, creates a more favorable environment for buyers.

Economic Undercurrents: What’s Driving the Forecast?

It’s vital to understand the broader economic forces that are shaping this housing forecast. C.A.R. projects a slight slowdown in U.S. GDP growth to 1 percent in 2026, following a projected 1.3 percent in 2025. California’s nonfarm job growth is also expected to be modest at 0.3 percent in 2026, contributing to a projected unemployment rate of 5.8 percent.

This might sound a bit concerning, but in the context of the housing market, it can play a balancing role. A strong, rapidly growing economy can fuel rapid home price appreciation. A more measured economic pace, on the other hand, helps to temper extreme price swings and contribute to the stability we’re forecasting.

We also anticipate inflation to average around 3.0 percent in 2026, a slight increase from the projected 2.8 percent in 2025. While higher inflation can erode purchasing power, the projected drop in mortgage rates is expected to offset some of this impact on housing affordability.

Inventory: A Gradual Improvement

A key factor influencing both sales and prices is the availability of homes for sale. The 2026 forecast suggests that housing supply will continue to improve, potentially reaching near pre-pandemic levels. Active listings are expected to be up by nearly 10 percent. This is excellent news for buyers who have been frustrated by the lack of choices.

When there are more homes on the market, sellers have to be more competitive, and buyers have more leverage. This gradual increase in inventory is crucial for sustaining a healthy market. As Jordan Levine, C.A.R.’s Senior Vice President and Chief Economist, pointed out, “Housing sentiment will see some improvement in 2026” as economic uncertainty clears and mortgage rates decline.

Challenges on the Horizon

While the forecast paints a picture of cautious optimism, it’s not without its potential hurdles. Levine also highlighted ongoing challenges such as “mounting headwinds such as the ongoing trade tensions between the U.S. and its trading partners, the home insurance crisis, and a potential stock market bubble.”

These are important considerations. The home insurance crisis, in particular, continues to be a significant concern for many homeowners and can impact buying decisions. Trade tensions and stock market volatility can create broader economic uncertainties that could influence consumer confidence and, consequently, the housing market.

My Take: A Market for Savvy Buyers and Patient Sellers

From my perspective, the 2026 California housing market forecast points to a period of balanced conditions. For buyers, this means opportunities. The slight increase in affordability, coupled with a more stable price appreciation and improving inventory, makes it a more approachable market than in recent years. It’s a time to be strategic, do your research, and potentially negotiate from a stronger position.

For sellers, it’s important to have realistic expectations. While prices are projected to rise and sales are expected to increase, the days of wildly inflated offers might be behind us for now. A well-priced, well-presented home will still attract strong interest, but patience and a clear understanding of current market values will be essential.

The key takeaway for me is that the California housing market is evolving. It’s moving away from the extreme volatility of the past and towards a more sustainable, predictable future. It’s less about getting lucky and more about making smart, informed decisions.

2026 California Housing Forecast Summary

*Note: Housing Affordability Index is the percentage of households that can afford to purchase a median-priced home.

Mortgage Bankers Association

Kitchen and bath updates, fresh paint, decluttering and curb appeal boost home value as buyers face steady interest rates

People considering buying or selling a home are facing a unique market. Real estate has been in flux for several years, and high interest rates have made borrowing more expensive.

The Mortgage Bankers Association projects 30-year mortgage rates will level off at 6.5 percent for the foreseeable future. That could disappoint buyers who were waiting for lower rates, but it may also push hesitant shoppers to act in 2025. Sellers, meanwhile, would be wise to make improvements that help their properties stand out and secure the best possible price.

Make kitchen and bath updates

The kitchen remains the heart of the home, and moderate upgrades such as resurfacing cabinets, changing fixtures or replacing countertops can give the space a refreshed look. Bathrooms are equally important. Katie Severance, author of The Brilliant Home Buyer, calls kitchens and baths “money rooms” because they add the most value.

Declutter living spaces

Removing unnecessary belongings can make rooms feel larger, which appeals to buyers, especially as open floor plans remain popular. A tidy, streamlined home also makes it easier for potential buyers to imagine themselves living there.

Add fresh paint

Painting is one of the most cost-effective renovations. According to HGTV, freshly painted rooms appear cleaner and more modern, making them attractive to buyers. Experts recommend neutral colors to appeal to the broadest audience.

Enhance curb appeal

A property’s exterior is the first thing buyers see in person or online. Homeowners should keep lawns maintained and consider adding colorful, low-maintenance plants to boost curb appeal.

Expand usable space

Finishing basements or attics, converting garages into living areas or adding a three-season room can increase livable square footage—another strong selling point.

With rates steady and competition expected to remain, homeowners can maximize resale value by making targeted improvements before listing their properties.