As we move through the first quarter of 2026, the San Fernando Valley housing market is showing signs of seasonal softness, normal for this time of year, but with a very real split between the single family marketplace and the condo sector. Buyers still have opportunities, and sellers need to remain strategic, but the story varies depending on the type of property. We also have a dichotomy of interest rates having dropped to the lowest level in several years, and geopolitical elements that can change the dynamics of the spring real estate market.
Single Family Homes: Stable and Solid Despite Lower Sales Volume
The single family home market continues to hold firm. The median sale price sits at $1,100,000, which is unchanged year-over-year, and reflects a market that has stabilized rather than declined. Inventory levels remain manageable at 1,510 active listings, and months of inventory is sitting at 4.1 months, a more balanced environment compared to the hyper competitive years behind us.
However, sales activity has cooled:
- New listings down 23% YOY
- Closed sales down 8% YOY
- Pending sales down 41% YOY
Some of this slowdown is seasonal, but much is tied to buyer affordability. Even with mortgage rates having eased from their prior peaks, today’s pricing still requires strong income, reserves, and solid credit. Still, properties priced correctly and in good condition continue to trade, and the sector remains fundamentally healthy.
Condominiums: A Softer Market With Structural Challenges
The condo marketplace is where we’re seeing the greatest pressure.
The median condo sale price is $600,000, down 6% year-over-year, while closed sales are down 1%, and pending sales dropped 30%. Inventory has increased to 750 active units, up 24% YOY, pushing months of inventory to 6.3 months, firmly a buyer leaning environment.
The biggest challenges aren’t buyer demand alone, they are structural issues within many HOAs. Complexes in good financial shape with reasonable HOA dues can still have good marketability. Unfortunately too many complexes presently have issues:
1. Insurance Procurement and Cost
Many HOAs across California are struggling to secure master insurance policies. Premiums have skyrocketed, some carriers have exited the market, and remaining insurers require higher deductibles and stricter coverage terms. This can force associations to:
- Tap into reserves,
- Raise monthly dues,
- Implement special assessments, or
- Leave coverage gaps that complicate mortgage underwriting.
2. Aging Buildings and Deferred Maintenance
Older condo complexes are facing steep repair costs, higher reserve requirements, and in some cases SB 326 balcony inspection related expenses. When reserves are inadequate, the financial stability of the HOA can immediately become a red flag for lenders.
3. Financing Roadblocks
This is the most important point for buyers and sellers: If a condominium complex doesn’t meet conventional underwriting guidelines, the unit will not qualify for “A-paper” financing, no matter how strong the borrower’s income, credit score, or assets may be.
Fannie Mae, Freddie Mac, and major wholesale lenders require:
- Adequate reserves
- Proper master insurance coverage
- No litigation that could affect structural or financial stability
- No excessive delinquencies
- No major deferred maintenance red flags
If the HOA fails even one major test, buyers may be limited to cash or non-QM financing, which often reduces the buyer pool and affects marketability.
This dynamic is contributing heavily to the softer condo market, the slower sales pace, and the more noticeable downward pressure on pricing.
A Market With Opportunities, If You Navigate It Properly
Even with softer conditions, this is not a “bad” market. It’s simply a more balanced and more cautious one.
For Buyers:
- Single family homes are more accessible with fewer bidding wars.
- The condo market offers opportunities, but requires careful HOA review.
- Loan programs, including down payment assistance and specialized products, remain strong options.
For Sellers:
- Pricing and condition matter more today than in the frenzy years.
- For condos, HOA documentation and financials must be clean and complete to avoid loan killing surprises.
- Pre-listing due diligence is essential to avoid escrows falling apart.
The San Fernando Valley market in early 2026 isn’t overheated, nor is it collapsing. It’s resetting, stabilizing, and reacting to economic pressures, underwriting guidelines, and the realities of community association management.
If you’re thinking of buying or selling—whether single-family or condo—strategy and preparation matter more today than ever. As a seasoned real estate broker and mortgage professional, I can help you evaluate your options, understand your financing pathways, and navigate the complexities on both sides of the transaction.
Reach out anytime if you’d like a personalized analysis or want to discuss your next move.
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
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