Housing Market COLLAPSE: Zillow Officially Cuts Forecast

From the Desk of Attorney Omar Zambrano: Helping 10,000 Families Become Debt-Free in 2025

From the Desk of Attorney Omar Zambrano: Helping 10,000 Families Become Debt-Free in 2025

📍 Proudly Serving Los Angeles, San Bernardino & Riverside Counties

As of Monday, April 7, 2025, the housing market in Los Angeles County, and across the nation, is facing a serious turning point. Zillow has officially downgraded its housing price forecast, indicating a slowdown that threatens the financial well-being of millions of homeowners and potential buyers. U.S. home prices, tracked by the Zillow Home Value Index, are now expected to increase by only 0.8% from February 2025 to February 2026. This is a sharp decline from last month's forecast of 1.1% and far below the 2.9% growth projected in January.

In LA County, the median home price is currently around $850,000 (LA County Assessor, Q1 2025). This forecast downgrade creates a ripple effect that threatens to stagnate the local market and make the dream of homeownership even more elusive for many. With $1.35 trillion in U.S. credit card debt, more than 225,000 layoffs across the country, and a $1 billion budget deficit in LA County, the financial strain is palpable.

Having witnessed firsthand the devastation of housing crises—especially following the 2008 crash—I understand the consequences of a cooling market. I guided countless families in LA County through the foreclosure process, and today, I’m offering insight on how you can navigate these turbulent waters. Let’s break down the factors affecting LA County, understand what this means for you, and explore strategies to protect your financial future.

Zillow’s Forecast Downgrade: A National Housing Slowdown Hitting LA County Hard

Zillow’s latest forecast is a wake-up call for the housing market. Nationally, home prices are expected to rise only 0.8% from February 2025 to February 2026—down from 2.9% just two months ago. In LA County, this downgrade is part of a broader trend. Active listings in LA County have risen by 12% year-over-year, with 18,500 homes on the market (LA County MLS, March 31), up from 16,518 last year. This is a clear signal that the market is shifting towards a buyer’s market, where supply is outpacing demand.

This trend isn’t isolated to Los Angeles. Zillow predicts only 4.1 million existing home sales nationwide in 2025, the third straight year below pre-pandemic levels of 5.3 million (2019). In LA County, home sales have fallen from 65,000 in 2019 to just 52,000 in 2024 (LA County Assessor). With median home prices at $850,000 and mortgage rates hovering around 6.7%, many potential buyers are priced out of the market.

John, one of my clients in Pasadena, asked, “Is this a collapse?” While we aren’t there yet, the market is undeniably cooling. The signs are all there, and LA County is mirroring the national trend. It’s time to pay attention and start planning for the coming changes.

LA County’s Softening Market: Rising Inventory, Falling Demand, and Affordability Challenges

Zillow’s downgrade is not an isolated case—it reflects a broader cooling trend in the market that’s particularly evident in LA County. Active listings in LA have increased by 12%, which points to rising supply in a market where demand is faltering. As inventory builds, buyers are becoming more hesitant to make purchases, and many potential buyers are being locked out due to high prices and rising mortgage rates.

Affordability remains the major barrier for many. Over 60% of households in LA County are considered cost-burdened, meaning they spend more than 30% of their income on housing (LA County Housing, April 2). With median incomes of $45,000 (Census, 2024) and an average mortgage payment of $5,800 (LA Times, April 6), many families are simply unable to enter the market, further stalling demand.

Moreover, Zillow’s Heat Index, which tracks market competitiveness, shows a notable decline in LA County’s competitiveness. The Heat Index dropped from 85 in December 2021 to 62 in December 2024, indicating that LA’s housing market is cooling, just like other major cities like Raleigh, NC, and Charlotte, NC, which have seen even steeper drops.

Economic Drivers in LA County: Affordability Issues, Inventory Lock-In, and Unemployment

There are several key factors at play in the LA housing market that explain why the slowdown is happening. The primary issue is affordability. With mortgage rates at 6.7% and a median household income of just $45,000 in LA County, it’s simply too expensive for many people to buy homes. For the majority of buyers, the average mortgage payment of $5,800 is a heavy burden, and many are unable to afford the homes they want.

Another issue is rate lock-in, where homeowners with low mortgage rates are staying put and not listing their homes. In LA County, 52% of homeowners have mortgages with rates under 4%, and 38% own their homes outright (CoreLogic, 2024). This lock-in effect creates a tight inventory situation and makes it even harder for buyers to find homes, further exacerbating the affordability crisis.

Policy and Panic: The Impact of Trump’s Tariffs on the LA Housing Market

President Trump’s policies, particularly his tariffs, are adding another layer of uncertainty to the housing market. While the aim of the tariffs is to address trade imbalances, they have driven up the cost of construction materials, such as lumber, which is essential for building new homes. This has stalled housing production, particularly in LA County, and contributed to the supply-demand imbalance.

Additionally, Trump’s push to deregulate housing could lower home prices. However, the uncertainty generated by tariffs and rising construction costs has made it difficult for the housing market to recover. We find ourselves in a paradox where deregulation may help lower prices, but the uncertainties surrounding the tariffs are preventing the recovery from taking place as quickly as many had hoped.

Strategic Responses for Navigating LA County’s Housing Crisis

To help you navigate the current housing crisis, here are some strategies to consider on April 7, 2025:

• Cut Costs: Save thousands annually by cooking meals at home rather than ordering takeout. A $5 home-cooked meal versus a $34.81 DoorDash meal can save you between $3,000 and $7,000 a year, which can be vital with LA’s high rent and looming tariff hikes.

  
  

• Debt Defense: Consider transferring high-interest credit card debt to 0% APR cards, saving over $6,000 annually. With rising mortgage rates and other financial pressures, managing debt is more important than ever.

  
  

• Buy Smart: Target areas in LA where demand is softening but prices are more reasonable. South LA is one example of an area where you may be able to negotiate better terms and avoid the inflated prices in other parts of the city.

  
  

• Hold or Sell: If your mortgage rate is below 4%, it may make sense to hold your property and wait for the market to stabilize. If you're looking to sell, consider listing your property in high-demand areas like San Marino and Santa Monica, where prices are still more resilient due to low inventory.

  
  

• Save Aggressively: Build a financial safety net by saving 3 to 6 months' worth of expenses. With prices softening in LA and potential job losses on the horizon, it’s more important than ever to be financially prepared for the future.

My Commitment: Protecting Your Financial Future

As an attorney dedicated to Helping 10,000 Families Become Debt-Free in 2025, I am committed to guiding you through these tough times with tailored strategies for protecting your financial future. Whether you need assistance with bankruptcy protection, debt restructuring, or wage garnishment defense, my firm is here to help.\

Your Strategic Response – Steps You Can Take Today

1. Pause Foreclosure or Eviction

If you’ve received a Notice of Default (NOD) or Eviction Notice, you can:

• Request a hearing.

• File for bankruptcy protection to pause the process.

• Force your lender to prove ownership of the note and right to collect.

2. Evaluate Bankruptcy Options

Chapter 7:

• Wipes out unsecured debts (credit cards, medical bills).

• Frees up cash to protect your home.

Chapter 13:

• Lets you repay mortgage arrears over 3–5 years.

• Stops foreclosure and collections instantly.

3. Negotiate with Your Lender

Many lenders are willing to:

• Postpone foreclosure

• Modify terms

• Lower payments

But they only work with informed and proactive borrowers. I help negotiate these outcomes daily.

4. Refinance Before Your Credit Drops

If you’re still current but worried, now is the time to act.

• Credit score above 620? You may still qualify for FHA streamlined refinance.

• Scores below 580? Time is limited—act now before your options vanish.

5. Don’t Wait Until the April Jobs Report

By the time the jobs data hits, the dominoes will already be falling. Get ahead of the wave.

Legal Services We Offer – Real Protection, Right Now

We serve working families in Los Angeles, San Bernardino, and Riverside Counties.

Bankruptcy Protection (Chapter 7 & 13) 🛡️

• End lawsuits, stop foreclosures, and erase debt.

Auto Loan & Repossession Defense 🚗

• Stop the repo man. Negotiate or reinstate your loan.

Credit Card Debt & Loan Negotiation 💳

• Reduce balances. Settle for less. Avoid court.

Wage Garnishment & Lawsuit Defense 💰

• Fight back in court. Protect your paycheck.

Foreclosure Defense & Mortgage Assistance 🏠

• Delay, fight, or stop the sale.

• Modify your loan. Save your home.

Free Financial Consultation 💬

• We’ll review your situation. No charge. No pressure

📞 Call or Text Now: (626) 338-5505

🌐 Visit: www.omarzambrano.com

📱 WhatsApp: +1-626-550-7071

📍 Office: 12738 Ramona Blvd, Baldwin Park, CA 91706

Closing Thoughts: Navigating LA’s Housing Market Crisis

With Zillow’s forecast downgrade, it’s clear that the housing market in LA County is facing a significant slowdown. Rising inventory, affordability issues, and a broader economic slowdown are all contributing to the current situation. However, by making strategic decisions and planning carefully, you can still protect your financial future. It’s time to act and secure your position in LA County’s housing market before things change even further.

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