How Hot Are CA Metro Housing Markets In 2025? 50 Largest Cities Ranked

CALIFORNIA — How hot is the real estate market in California’s largest metro areas?

In a new analysis, the online real estate marketplace Zillow ranked the 50 largest U.S. metro areas based on the company’s home value growth projections, how quickly homes sell, job growth, new construction permits, and expected growth in owner-occupied housing.

Buffalo, New York, is projected to be the hottest housing market this year, the first time it has held the title in back-to-back years, Zillow said. San Diego ranked the highest of any California city, at number 19.

Under Zillow’s formula, home values increased 3.8 percent to an average value of $939,174, and are expected to grow another 2.5 percent in 2025.

Los Angeles was well behind in 34th place, and dropped 11 spots from the year before. Home values increased 4.6% to $949,057, and are expected to grow 1.7% in 2025. (This analysis does not take the fires into consideration.)

Sacramento ranked 37th, with home values increasing 2.1% to $577,630. Near the bottom was San Jose at 48th, with prices rising 7.9% to $1,588,186, but expectations that they will shrink 0.2% in the upcoming year. San Francisco was in second to last place, having dropped 19 spots from the prior year. Prices rose 2.7% to $1,140,718, and are expected to shrink 1.7% in the upcoming year.

Behind Buffalo, the hottest markets are Indianapolis; Providence, Rhode Island; Hartford, Connecticut; Philadelphia; St. Louis; Charlotte, North Carolina; Kansas City, Missouri; Richmond, Virginia; and Salt Lake City, respectively.

Zillow said its 2024 forecast that Buffalo would have the hottest real estate market in 2024 was proven out in its market heat index. The city has the most new jobs per new homes permitted, Zillow said, noting that new jobs often mean new residents, which raises competition and drives up prices unless builders can match the additional demand.

Affordability is a top consideration for buyers. Zillow said lower-than-average home prices and rent costs in Buffalo, Indianapolis, St. Louis and Kansas City, Missouri, pushed those cities to the top 10.

Buyers consider “relative affordability,” too. Providence, Rhode Island; Hartford, Connecticut; and Philadelphia are close, more affordable alternatives to expensive Northeast cities such as New York or Boston, Zillow said.

Among the fastest-growing markets is Virginia Beach, which leapfrogged over 23 other markets to the No. 13 spot in this year’s forecast. Memphis, Tennessee, fell the farthest, dropping 30 places as new housing permits eclipsed low job growth.

The western half of the country was shut out of the top 10 in 2024, but this year, Salt Lake City came in at No. 10. San Diego was the only other Western metro in the top 20.

Cities at the bottom of the ranking are New Orleans; San Francisco; San Jose; Portland, Oregon; Austin; Minneapolis; Denver; Memphis; Milwaukee; and New York City, respectively.