As the most populous U.S. state, California is a popular market for real estate investing. But which cities offer the best returns and opportunities?
ABL’s California team has helped countless investors like you identify profitable markets and get the funding they need for fix-and-flips, new construction, and long-term rentals. Seize investment opportunities and grow your portfolio with our fast, flexible loan programs.
What to Look for in California Real Estate Markets
When analyzing potential California markets to invest in, look for the following:
Population Growth
A growing population indicates a high demand for housing, which puts upward pressure on home values and rents and could boost your returns.
Annual Appreciation
Annual appreciation compares how much home values have increased or decreased over the last year (expressed as a percentage). Look for appreciating markets.
Active Listings
Active listings refer to the number of properties currently on the market. The more active listings, the more potential investment opportunities.
Median Days on Market
Median days on market refers to the median number of days properties sit on the market before being sold or delisted. A low number indicates a relatively active market.
California Housing Market Snapshot
| Population growth | -0.3% |
| Annual appreciation | -0.58% |
| Active listings | 64,963 |
| Median days on market | 43 |
Before diving into the top places to invest in California, consider the state as a whole for reference. From April 1, 2020, to July 1, 2024, California’s population shrank by 0.3%. Then over the last 12 months, its median listing price fell by 0.58%. Meanwhile, the state had a total of 64,963 active listings and a median days on market of 43.
Thus, it’s safe to say California housing is experiencing a market correction. However, some cities are performing better than others. Here are the top-performing metros in the state:
1. Bakersfield
| Population growth | 3.2% |
| Annual appreciation | 0.56% |
| Active listings | 1,886 |
| Median days on market | 47 |
Located two hours north of Los Angeles, Bakersfield ranks first among California metros to invest in. Not only is its population growing rapidly, but home values are up by 0.56% from last year. In other words, the city is bucking the statewide trend of market contraction.
Furthermore, in April 2025, Bakersfield had 1,886 active listings, which stayed on the market for a median of 47 days. This means there are plenty of properties to choose from, and sales are moving at a steady clip.
2. Stockton
| Population growth | 1.3% |
| Annual appreciation | 1.05% |
| Active listings | 1,212 |
| Median days on market | 39 |
Stockton is a city about an hour and a half east of San Francisco. From April 1, 2020, to July 1, 2024, its population grew by an impressive 1.3% to 324,975. This has put upward pressure on home values, which grew by 1.05% over the last year, the third-fastest rate statewide.
At the same time, Stockton home sales are moving relatively quickly, with a median days on market of 39, four days less than the state median.
3. Riverside
| Population growth | 2.6% |
| Annual appreciation | 0.43% |
| Active listings | 13,014 |
| Median days on market | 52 |
Less than an hour inland of Los Angeles is the growing city of Riverside. From April 1, 2020, to July 1, 2024, its population grew by 2.6%, the fifth-fastest rate statewide. Meanwhile, home values have jumped 0.42% over the last year.
However, what most sets Riverside apart is the number of homes for sale. In April 2025, there were 13,014 active listings, the second-highest level statewide and second only to Los Angeles.
4. Sacramento
| Population growth | 2.1% |
| Annual appreciation | -2.49% |
| Active listings | 4,133 |
| Median days on market | 38 |
Sacramento is the capital of California and has 535,798 residents. As a result, there are many properties to choose from, with 4,133 active listings in April 2025 alone. Plus, home sales are moving relatively fast, with median days on the market at 38.
While Sacramento home values fell over the last year, now may be a good time to buy the dip before they rise again. After all, Sacramento is still growing. From April 1, 2020, to July 1, 2024, its population grew by 2.1%.
5. Los Angeles
| Population growth | -0.5% |
| Annual appreciation | 0.25% |
| Active listings | 16,377 |
| Median days on market | 44 |
With over 3.8 million residents, Los Angeles is the most populous city in California. It also has the highest inventory of homes for sale, with 16,377 active listings in April 2025. This wide home selection makes it a great market for finding potential deals.
That said, Los Angeles’s population shrank slightly over the last few years. However, home values continue to grow due to strong demand and limited supply.
Partner with ABL
Once you’ve selected a California market to invest in, the next step is to secure financing for an investment property. That way, sellers will take you more seriously and you’ll have a competitive edge when making offers.
At ABL, we’ve funded countless real estate deals across California with our fast, flexible hard money loans. Whether you want to flip a property, build one from the ground up, or acquire a turnkey rental, we can help make it happen. Pre-qualify today!
Methodology
To determine the top California real estate markets to invest in, we ranked 23 California metros by fastest population growth, highest annual appreciation rate, most active listings, and lowest median days on market. Each category was weighted equally to arrive at a composite score for each city.
We used the following data sources:
- Population growth: Percent change between April 1, 2020, to July 1, 2024, from the U.S. Census Bureau
- Annual appreciation rate: April 2025 median listing price year-over-year change from Realtor.com® Economic Research
- Median days on market: April 2025 median days on market from Realtor.com® Economic Research
- City populations: July 1, 2024, population estimate from the U.S. Census Bureau