California's Market Tilts Toward Buyers as Flippers Pull Back and Concessions Climb

Two new reports land on the same conclusion: buyers are running the show in much of California. Redfin data shows nearly one in five September home sales included a price cut - the highest-ever share for the month - and more than two in five August buyers received seller concessions, such as help with closing costs or paying points to lower the mortgage rate, CalHomeNews reported Saturday.

The concession table tells the regional story. In Los Angeles, 16.5% of September sales carried a price cut and 56.2% of August buyers got concessions from sellers. San Diego ran hotter on both measures - 21.7% of sales had price cuts and 57.1% of buyers got concessions. Riverside sellers conceded in 58.0% of August deals. The Bay Area is the exception: Redfin says it is the only California metro where sellers still hold the upper hand, powered by AI companies and well-paid employees. Redfin senior economist Asad Khan said sellers who move homes quickly are the ones getting savvier about pricing from day one.

The flip business is feeling the squeeze hardest. ATTOM reports 8,444 homes were flipped statewide in the second quarter of 2026, down 16% from a year earlier, with flippers netting a median $75,000 profit - a 10.5% return that shrinks further after repair, tax, insurance and financing costs. Only two midsize metros, Bakersfield and Fresno, cleared 20% returns; San Jose and Sacramento flippers were stuck near 9%. In Los Angeles, 2,489 homes were flipped, down 26.2% on the year, at a 14.1% margin. "The second-quarter numbers continue the general downward trend in profit margins and gross profits we have seen over the past two years," said ATTOM CEO Rob Barber.

New construction is quietly becoming the value play in some markets. Zillow data shows that in half of California's six largest metros, new homes now cost less per square foot than existing homes. In San Diego, new construction is 14.4% cheaper per square foot - about $84 less - because builders are sitting on unsold inventory and cutting prices or offering concessions. In Los Angeles, San Francisco and San Jose, existing homes still win on per-square-foot cost.

For South Bay buyers, the takeaway matches the local tape: sellers who price to today's data are still finding escrows, but overpricing gets repriced in public - and the buyers who stay patient are the ones collecting concessions. Homeowners thinking of selling should know one in six September sales involved a cut, so pricing with the margin in mind beats pricing ahead of it.

Source: CalHomeNews - https://www.calhomenews.com/2026/10/10/sellers-bend-flippers-fold-californias-housing-market-tilts-toward-buyers/

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