Lately, I have been having more conversations that all seem to land in the same place. Buyers walk into a home, take a look around, and pause. Not because they do not like it, but because something does not feel right. The question usually comes out simply. Why does this feel so expensive for what it is. And the reality is, it is not just the price they are reacting to.
Affordability today is no longer just about what someone can qualify for.
On paper, many buyers still meet the requirements to purchase a home. Income, credit, and loan programs can align. But qualifying for a home and actually finding one within your budget are two very different things. For many buyers, that gap becomes clear the moment they start looking at inventory. According to the California Association of Realtors, only about 18 percent of households in California could afford a median-priced home in recent quarters, which helps explain why it feels so tight.
At the same time, the cost of living has increased across the board. Groceries, insurance, utilities, transportation, and everyday expenses have all moved upward. Housing does not sit separately from those costs. It sits on top of them. So even when a payment works mathematically, it may not feel comfortable in practice.
Affordability is no longer just about whether you can buy. It is about whether it still feels sustainable after you do.
For many, renting can feel more flexible in the short term. It allows for adjustments in lifestyle, income, and location more easily, even though it may not provide the same long-term stability.
At the same time, demand has not disappeared. There are still many people actively trying to buy, but fewer homeowners are willing or able to sell.
A large portion of homeowners today are holding historically low interest rates from previous years. Selling often means giving up that position and taking on a higher rate in their next purchase. In many cases, even downsizing does not make financial sense. As a result, many homeowners are choosing to stay longer, even if their home no longer fully fits their needs. Over time, this can lead to deferred maintenance and reduced turnover, which limits available inventory.
For buyers, this creates another layer of complexity. Even when homes become available, they do not always align with budget, location, or lifestyle needs. Many are expanding their search areas or moving farther out to make a purchase possible.
For some, this means longer commutes and adjustments to daily routines, work, and family responsibilities. These are not just financial decisions. They are lifestyle decisions that can have a lasting impact.
At the same time, the cost of ownership does not stop at the purchase. Maintenance, repairs, and improvements can add up quickly, especially for first-time buyers. For some, continuing to rent while building a plan can feel more manageable in the short term.
That said, long-term financial positioning still matters. Whether through real estate or other investments, being intentional about how you build equity is an important part of keeping pace over time.
At the same time, there are also homeowners who need to sell. Life events continue regardless of market conditions. Job changes, relocations, financial shifts, and family transitions all create movement. So the market is not frozen, but it is uneven.
Layered on top of this is a broader economic and policy environment that continues to evolve. Interest rates, insurance costs, lending standards, and housing policies all influence how people make decisions and how confident they feel moving forward.
Buyers today are not only evaluating price. They are evaluating what they are getting in return.
A large portion of the housing stock, especially throughout Southern California, was built decades ago. Many homes hold long-term value due to location, but they may also come with deferred maintenance or aging systems. For a buyer, the purchase can also represent future repairs and ongoing costs.
These factors are not always visible during a showing. They often come up during inspections or within the first few years of ownership. With insurance requirements evolving, some updates are being addressed sooner, adding another layer of cost and urgency.
On the other side, renovated homes offer a more move-in ready experience, but they are priced differently. Investors purchase, renovate, carry costs, and resell with a targeted margin. That pricing reflects both the improvements and the business behind the project.
When all of these factors come together, the market can feel tight. Higher borrowing costs, rising living expenses, limited supply, and added ownership costs all reduce flexibility.
Markets like this rarely shift all at once. The pressure builds gradually, and people tend to feel it before it becomes obvious in the data.
This does not mean that buying or selling no longer makes sense. It means the strategy matters more than ever. Understanding trade-offs, looking beyond surface-level presentation, and aligning decisions with both short-term lifestyle and long-term goals has become essential.
The housing market has not only changed in price. It has changed in how it feels to participate in it.
And that shift matters.
Because once you understand why it feels this way, it becomes much easier to make decisions with clarity instead of hesitation.
If you have been trying to make sense of it, you are not alone. These are the conversations happening every day, and they are worth having.
If you found this helpful and want to stay informed, feel free to subscribe to Catching Up with Kayla-Rae here on LinkedIn. If you are thinking about buying, selling, or simply want to better understand your options, you are always welcome to reach out or connect. I am happy to help you navigate it in a way that makes sense for you.
Kayla-Rae Campbell | Hello@KaylaRaeCampbellRE.com
REALTOR® | DRE #02120178 | ABR® | NAR GREEN | Luxury Collective