“The greatest danger in times of turbulence is not the turbulence—it is to act with yesterday’s logic.” — Peter Drucker

You’d think with higher rates and slower demand, home prices would be sliding down, right? But real estate doesn’t follow a neat equation—it’s human behavior in motion.

Economists call this “downward rigidity”—the phenomenon where real estate prices are slow to fall, even during a significant decline in demand. Instead of dropping their asking price to reflect a weaker market, sellers often withdraw their property from the market entirely, which reduces supply and helps to prop up prices.

Here’s what the data is saying right now (U.S. single-family homes):

• Active listings across the U.S. were about 1.09 million in August 2025, nearly unchanged from earlier this summer. (Realtor.com / FRED)
  
  

• The national median existing-home price in July 2025 was $422,600, up 4.2% year-over-year. (NAR)
  
  

• Newly pending listings nationally in August ticked higher compared with a year earlier, suggesting buyers are still active where supply exists. (Zillow Research)
  
  

• Months’ supply of inventory remains tight nationally at 3.4 months in July, well below a balanced market of 6 months. (NAR)
  
  

Translation: buyers waiting for both lower prices and lower rates may be waiting a long time.

Zoom in on Southern California, and the same psychology is at play: sellers are holding the line.

• Los Angeles County: Median sale price ~$909,500, up ~1.1% YoY, but homes now sit ~53 days on market (vs 42 last year). (Redfin)
  
  

• Los Angeles City: Median sale price ~$1,032,500, up ~2.2% YoY, homes lasting ~62 days on market (vs 47 last year). (Redfin)
  
  

• Orange County: Median ~$1,174,000, essentially flat YoY, but days on market jumped from ~35 to 53. (Redfin)
  
  

• Irvine: Median ~$1,555,000, up ~3.3% YoY, but homes now linger ~65 days vs ~31 last year. (Redfin)
  
  

• San Diego County: Median ~$907,000, up ~1.3% YoY, but days on market stretched to ~42 vs 25 last year. (Redfin)
  
  

• Riverside County: Median ~$605,000, down ~0.6% YoY, but inventory has jumped ~88% year-over-year. Homes now take ~64 days to sell (vs 43 last year). (Redfin; First Tuesday Journal)
  
  

Across the region, prices are flat to slightly up, but days on market have stretched significantly. That’s downward rigidity in action—sellers refuse to slash prices, so homes just sit longer.

This is the psychology of the market: hesitation on one side, resilience on the other. It’s what keeps housing values from free-falling, even when demand cools.

If you’re a buyer or investor—do you play the waiting game, or do you get strategic and move while others sit on the sidelines?

Let’s talk strategy. Please contact me if you’re navigating these shifts—I’ll show you how to create opportunity in a market that looks “stuck.”

Jason Bergman - The best agent in Los Angeles Research Desk Insight:

From our analysis, this is a textbook case of downward rigidity. Housing markets don’t adjust like stocks or commodities when demand cools. Instead, sellers withdraw or wait, constraining supply and holding prices steady. The trade-off? Fewer transactions and longer days on market. Until we see a meaningful expansion in inventory or a significant shift in rates, price corrections are likely to be shallow. The story ahead is not collapse—it’s stagnation.