For the first time in nearly two years, home prices in California have declined. According to the California Association of Realtors, the median price of a single-family home in May was $900,170, marking a 1% decrease from $908,000 in May 2024. This is the first year-over-year decline in 23 months.
The drop in prices is attributed to elevated mortgage rates, which have affected both home prices and overall sales in the state. Sales were 4% lower compared to the previous year, and homes are staying on the market longer, averaging 21 days — a 31.3% increase from the same time last year, as reported by KTLA.
The decline in home prices varies by region. The Los Angeles metro area and Central Coast experienced increases of 1.8% and 6.2%, respectively, while the San Francisco Bay Area saw a decline of 3.8%. Condominiums and townhomes faced a sharper decline, with prices dropping by $15,000, or 2.2%.
Experts suggest that the current trend may continue as long as mortgage rates remain high. The California housing market, known for its resilience, is now facing challenges as affordability becomes a growing concern.
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