California Home Prices Drop in 14 of 16 Metros in December

California home prices declined in 88% of the state’s major metro areas based on Zillow’s December year-over-year data, with 14 of 16 regions posting a drop from a year earlier.

In the Los Angeles–Orange County area, home values were down 1% from a year earlier. The decline was modest compared with recent gains: prices rose 4% in 2024, and surged 39% over the 2020–2023 period. Experts said the slip is not large, but it signals a small easing in a market where affordability has been a major burden for buyers.

The shift drew attention because until not long ago, price declines were rare across the state. Through March of last year, California recorded 14 straight months in which every metro area showed year-over-year price increases.

Other Southern California regions also posted year-over-year declines in December. The inland region fell 2%, after rising 3% in 2024 and jumping 49% over the prior four years. San Diego was down 2% in December, even though it gained 4% in 2024 and rose 51% from 2020–2023.

Statewide, home values were down 2% at the end of last year, following a 3% increase in 2024 and a 38% surge over 2020–2023.

Only Visalia and Fresno posted year-over-year gains among the state’s metro areas, up 1% and 0.2%, respectively.

The weakness was attributed to intensified competition as listings increased, along with growing economic uncertainty. The explanation was that as more homes are put up for sale, sellers are pushed toward price adjustments, and concern about the economy can weaken buyer sentiment.

Recent conditions also point to a buyer’s market in California, with high interest rates and high prices keeping many would-be buyers on the sidelines and widening the gap between supply and demand.

According to Redfin, sellers outnumbered buyers by 45.6% in the Los Angeles market as of last month. In Riverside, sellers were 53.8% higher. The gap was narrower but still pointed to a buyer’s market in Anaheim and San Diego, where sellers exceeded buyers by 20.6% and 21.6%, respectively. Redfin defines a buyer’s market as one in which sellers outnumber buyers by more than 10%.

Experts said that with price weakness in December and mortgage rates falling to about a three-year low, homebuying pressure could ease somewhat this year. They added, however, that if rates drop further and buyer demand rushes back in, prices could rise again.

BY HOONSIK WOO [woo.hoonsik@koreadaily.com]