As a native of the San Fernando Valley, and selling real estate for over 40 years, I’ve seen several housing economic cycles. The San Fernando Valley housing market has always been shaped by a combination of economics, policy, interest rate cycles, demographic shifts, and more recently insurance, HOA, and affordability pressures. When you look back from 1959 to today, clear patterns emerge: long term appreciation, punctuated occasionally by market shocks… but always recovering stronger than before.

Below is a high level walk through of that history, then a breakdown of where we stand right now in early 2026, and what the next 12–24 months are likely to bring.

A Brief Historical Overview: SFV Housing Since 1959

While every decade had its own flavor, the long term trend has been remarkably consistent:
Real estate in the SFV appreciates over time, with temporary dips always followed by new highs.

Here’s the chronology from your charts and the typical economic markers

1959–1970: Post-war expansion, the building boom

• Massive tract home development across the West Valley.
• Aerospace industry was a primary economic driver
• Very stable interest rates in the 5–7% range.
• Prices increased gently but steadily as population surged.
• Home prices climbed from $19,294 to $31,100

1970s: Inflation & rising interest rates

• Stagflation created affordability challenges.
• Mortgage rates climbed, but so did wages.
• Prices still appreciated, just more erratically.
• Insurance and regulation were minimal—unlike today.
• Home prices 1971 $33,400 – 1979 $101,132

1980s: Volatility and then stabilization

• Early 1980s: Out of control inflation. Rates hit 18%, essentially freezing the market.
• When Fed Chair Paul Volcker aggressively raised rates in 1979–1982 to fight inflation, short-term rates shot to 20%, while S&Ls were stuck with 30-year mortgages earning 6–8%.
• Deregulation (Well-Intended, Poorly Managed) Congress passed laws such as Depository Institutions Deregulation and Monetary Control Act (1980). These allowed S&Ls to offer higher interest to compete with money markets, make riskier loans and investments (commercial real estate, junk bonds, land deals). Created an era of over development. 1986–1991: Large-scale S&L failures; government takeovers accelerate. 1989: Creation of the Resolution Trust Corporation (RTC) to clean up insolvent institutions.
• One of the largest U.S. financial crises before 2008
• Lenders started getting creative with Adjustable Rate Mortgages
• 1985 mortgage rates dropped to 10%, with a locally strong economy appreciation was strong.
• Home prices 1980 $126,610 – 1989 $255,425

1990s: Recession, aerospace layoffs, Northridge earthquake

• Starting late 1980’s the aerospace industry (primary contractors & sub contractors) started leaving he San Fernando Valley region and relocating to states that offered a better tax and regulatory environment. 10’s of 1000’s of high paying jobs were lost.
• There was a national recession. The San Fernando Valley was the epicenter of the economic downturn. Housing market was weak
• Just when the local economy started to stabilize, the Northridge Quake January 1994 killed the housing market. No lender will loan in an area that is still shaking from aftershocks, or in a state of emergency. Many properties had to be rebuilt. The quake pushed many property owners in a weak equity position into foreclosure.
• Home prices 1990 $257,192 dropped to 1996 $194,382
• By the late ’90s, the Valley was firmly recovering. Home prices rebounded 1999 $247,016

2000–2007: The credit fueled boom

• Sub-prime, stated-income, no-doc loans. We said if a borrower could fog a mirror, they could qualify.
• Minimal underwriting standards.
• Both political parties was taking credit for the increase in the high percentage of home ownership.
• Mortgage Backed Securities full of garbage mortgages were being sold to the secondary money market.
• Prices shot up dramatically as financing became extremely loose.
• Home prices 2000 $273,713 2007 $679,398

2007–2012: The foreclosure & short-sale era

• Collapse of the subprime credit cycle and the secondary money market for mortgages was non-existent.
• Freddie Mac and Fannie Mae were taken over by the Gov’t. Conforming loan amounts were increased so higher priced properties still had some available loans available.
• Flood of foreclosures and bank-owned properties.
• The gov’t passed legislation attempting to slow foreclosures, but it only stalled the inevitable, and lengthened the duration of the recession and deepened property depreciation.
• Even though the general population wanted to buy foreclosed properties, the gov’t and banks wanted to liquidate the large portfolio of foreclosed loans asap, so they sold loans in bulk (3-400 loans at a time) to Wall Street Investors at discount. Prior to this large investment firms were not interested in single units for investment or rentals. This hurt the local economy as instead of the rents and future property appreciation going to local Mom and Pop investors, it was being sent to Wall Street.
• The Federal Reserve dropped the Fed Funds Rate to 0%, and used Quantitative Easing to artificially drop mortgage rates to around 3.5%
• Home prices 2011 dropped to $395,470

2011-2012: Starting a decade of tight underwriting & market stabilizing

• The Dodd Frank Regulations were passed substantially tightening lending and finance regulations.
• The pendulum flipped hard: Loans require full documentation, ATR/QM rules, higher credit standards.
• Lenders are more paranoid about making a loan that won’t pass the gov’t regulators than a loan that could go into foreclosure.
• Low rates supported affordability. Property values stabilized.

2013–2018: Pandemic surge

• Tighter loan underwriting but the low mortgage rates creates affordability.
• Record low mortgage rates (3.5-4.5%).
• Tight inventory
• Multiple offer frenzy across the SFV.
• Federal Reserve increased the Fed Rate and stopped the Quantitative Easing.

2019-2022: Pandemic disrupts economy, housing market, life as we knew it

• 2019 the housing market was slowing
• 2020 COVID hit internationally, disrupting travel, supply chains
• Some municipalities closed their economies. No public socializing, or entertainment. Working from home became a necessity for many industries.
• To offset the slowing economy, the Federal Reserve dropped the Fed Funds Rate to 0% and was aggressively using QE again to artificially drop the mortgage rates.
• Rates at 2.75% created a very affordable housing market.
• The population wanted home offices, yards
• Multiple offers on most listings.
• Home prices appreciated 2019 $671,901 to 2022 $840,000

2022-2023: Inflation, rate shock & normalization

• Federal Reserve perceived the inflation created by Pandemic supply chain issues was “Transitory” and left the rates too low too long. They were wrong, as the inflation was sticky, and went to 9% CPI.
• The Fed aggressively increased the Fed Funds Rate from 0% to 5.33%
• Sharp jump from 3% to 7–8% mortgage rates.
• Sales volume collapsed back to 2007-type lows—but not prices.
• Equity reached all time highs.
• Homeowners stayed put because of their ultra-low rates.
• Higher values and higher interest rates create potential buyer affordability issues.

2024-2025: Fed brings rates down (slowly), Gov’t brings economic uncertainty

• Market shifted from a frenzy to a more balanced buyer / seller environment.
• Potential sellers still hesitant on losing their ultra low mortgage rates.
• Capital Gains Taxes are considerations for potential sellers because of record equity accumulation.
• The historic average of ownership tenure of 7 years jumped to 15 years.
• Homeowner’s Insurance accessibility and pricing has become a major component in affordability.
• 2025 was supposed to be a turnaround year for the market, but we didn’t have a normal spring buying season as the Gov’t imposed Tariffs and economic policies that created a unstable market for both buyer’s and sellers. Prices soften
• HOAs began feeling pressure due to insurance and reserve requirements. Many will not qualify for “A” paper financing.
• Foreclosures are at historic lows, but increasing. Poorly managed HOAs and highly leveraged properties are most at risk.
• Home prices 2024 $950,000 2025 $925,000

Where We Stand Today – The 2026 San Fernando Valley Housing Market

Despite national headlines, the San Fernando Valley is not in a bad market. It’s a different market than 2020–2022, but not a highly distressed one.

✔ A more balanced market: sellers vs. buyers

• Buyers have more breathing room.
• Sellers must price based on today’s reality, not 2021 nostalgia.
• The gap between list price and sale price has normalized.

✔ Buyers finally have options and fewer multiple offers to compete with

• Some homes still get multiple offers, but only if priced correctly.
• Condition matters, but there’s a buyer for anything, if priced right.
• Need to be knowledgeable about the market. Have their finances and loan in place. Come in hard on a well priced property, plan to negotiate a logical price on an overpriced property or one with issues.
• Need to be careful of HOAs financial stability.

✔ Sellers must be realistic on pricing and condition

• Buyers are payment sensitive. Priced right, properties sell.
• Overpricing = prolonged market time & price reductions.
• Price aggressively especially if they have an HOA with issues. Know an HOA in distress will not qualify for “A” paper financing i.e. higher interest rates and high down payment required, losing a buyer base.
• New home developers are paying for buyers closing costs, and buying down the buyer’s mortgage rate. Resale sellers should consider that as a strategy.

✔ Flippers must sharpen their pencils

• Margins are thinner.
• Buyers scrutinize workmanship, permits, and quality more closely.
• Be careful of holding time frame and costs.
• Building and Safety is slammed with wildfire rebuilds and new construction. Getting through the gov’t process can take longer.

✔ HOAs must be scrutinized (a big one in 2026)

• Insurance issues
• Reserve studies
• Special assessments
• Read all complex’s documentation and financials
• Many associations are increasing dues (substantially)
• Weak HOAs is impacting buyer affordability and lender approvals.

✔ Affordability remains difficult—especially for first time buyers

• High prices + elevated rates + insurance costs = higher payment obstacles.
• Creative financing, seller credits, and first-time buyer programs are helping, but demand is still constrained.
• There are plenty of First Time Buyer and Down Payment Assistance programs. Having money is not an issue, as long as the buyer meets the criteria.

✔ Mortgage Rates Will Be the Biggest Driver

• If rates drift into the high-5s or low-6s, demand could surge. Too many new buyers can promote higher property pricing.
• If rates stay near 6-7%, we remain in a slow but steady market.
• If rates fall enough it will unlock sellers with low rates.
• Huge Federal and local municipal Budget Deficits can keep interest rates higher than they would be with a more balanced budget. Presently the Federal Debt is $38.5 Trillion and in 2025 over $100 Billion was paid in debt service. More debt, the gov’t has to sell more bonds, more competition for Mortgage Backed Securities.

✔ Employment & wage growth

• The SFV economy remains stable. Isn’t creating a lot of new jobs.
• If unemployment remains on the low side, housing demand holds solid.
• Unless the local gov’t policies change and become more balanced with taxation and regulations, businesses will continue to leave the state
• Artificial Intelligence will make business more productive, but over time no job will be safe from technology
• The more expensive you make labor, the cheaper it’ll be to replace labor with technology.
• Who will want to take on the debt of buying a home, if they don’t think their job/business is stable?
• There’s a possibility AI’s impact on labor stability can negatively affect the housing market, regardless of interest rates levels.
• If AI disrupts labor, how will the general population earn a living? Unfortunately the gov’t isn’t discussing this, or being proactive.

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Bottom Line

The San Fernando Valley’s housing market from 1959 to today tells a clear story:
Long term appreciation is resilient, even with temporary shocks.

Today’s market is not the boom of 2021, but it’s also not the bust some headlines suggest.
It’s a balanced, stable market influenced by interest rates, affordability, and evolving HOA/insurance factors.

Going into 2026, expect:

• Slow but steady appreciation
• Improved opportunities for buyers
• Sellers need to be realistic pricing wise
• Inventory growing
• Some condo complexes with poorly managed HOAs will be in financial trouble.
• A strong market foundation based on equity, credit standards, and demographic demand
• Foreclosures still at historic lows, but growing mainly from condos with bad HOAs, and highly leveraged properties.
• Apartment rents will drop due to substantial high density unit development (the gov’ts priority).
• Until the pendulum swings to a more balanced position, rental property suppliers will continue to be under attack from tenant rights groups and the gov’t. Unfortunately owning residential rental properties by mom and pop landlords in the Los Angeles region has become unaffordable. Extreme Rent Control, Just Cause Ordinances, high maintenance and insurance costs is making owners sell their properties and use 1031 Exchanges to own investment properties out of the state that make more economic sense.

The San Fernando Valley remains one of the most stable long term real estate environments in Southern California—just with a different rhythm than we saw during the pandemic.

If you are in the Los Angeles area, and have any questions or real estate sales or financing needs, feel free to contact me

Ron Henderson GRI, SRES, SFR, RECS, CIAS, CREN, GREEN
President/Broker
Multi Real Estate Services, Inc.
Gov’t Affairs Chair – Southland Regional Association of Realtors (2025)
Gov’t Affairs Chair – California Association of Mortgage Professionals (2017-2018)
Chairman – OutWest Marketing Meeting (Real Estate Education)
DRE #00905793 NMLS #310358
www.mres.com
ronh@mres.com
Specialist in the Art of Real Estate Sales and Finance
Real Estate market, mortgage rates, Los Angeles, San Fernando Valley, Conejo Valley, Simi Valley, Woodland Hills, West Hills, Calabasas, Chatsworth