Coastal California Towns Defy Housing Slump, Prices Soar to New Highs

As of October 2025, the national housing market has seen a significant slowdown in recent months due to ongoing affordability issues and economic uncertainty. However, many coastal towns in California are bucking this trend, with home prices continuing to rise.

The pandemic sparked a home-buying frenzy across the country, as historically low mortgage rates and the rise of remote work allowed people to move to more affordable and livable areas. This exodus from major cities like Los Angeles and San Francisco has driven up prices in nearby smaller communities, often pricing out local residents.

While mortgage rates have more than doubled from their pandemic lows and overall demand has cooled, home prices in California remain much higher than in 2019. The median sale price of a home in the state was $832,800 last month, up 2.2% from a year earlier and nearly $200,000 more than five years ago.

However, some coastal towns have seen even more dramatic price increases. In San Luis Obispo, the typical home value grew by about 3% to $1.1 million last month, the highest on record and 46% higher than in 2019. Carlsbad in San Diego County and Newport Beach in Orange County also reported record-high home values, up 87% and 4% respectively compared to 2019.

The common thread among these cities is that they are located hours away from major employment hubs like Los Angeles and San Francisco, making them attractive destinations for those seeking a quieter, more affordable lifestyle. This exodus from California's big cities to the suburbs shows no signs of slowing, at least for now.