California Home Prices Drop Steeper; LA Median $1.06M

High interest rates and ongoing economic uncertainty weighed on the U.S. housing market last year, and home prices in California fell by a steeper margin.

According to Realtor.com’s housing market update for December 2025, the median home price in the Los Angeles–Long Beach–Anaheim metro area was $1,062,500, down 2.9% from the same month a year earlier.

That decline was much larger than the nationwide median drop of 0.6% over the same period.

Demand weakening was cited as the biggest reason for the broader price adjustment. Joel Berner, a senior economist at Realtor.com, said, “The biggest reason was that buyers, as anxiety grew about income and employment prospects, did not feel that now was an appropriate time to move or buy a home.”

He added that in California, the perception that renting is much cheaper than buying also appeared to be suppressing demand. Berner said, “As the rental market has loosened somewhat, especially in the western region, in places where rents are stable or falling, there is an atmosphere where people do not feel the urgency that they must buy a home.”

Several metro areas in California also ranked among the nation’s largest year-over-year home price declines.

In the San Diego–Chula Vista–Carlsbad metro area, the median home price fell 6.7% from a year earlier to $899,999. The San Jose–Sunnyvale–Santa Clara metro area also saw a large adjustment, with prices down 5.5%.

Elsewhere, the Riverside–San Bernardino–Ontario metro area posted a 1.6% decline to $587,515. Median prices in the San Francisco–Oakland–Fremont metro area fell 2.0% to $872,000, while the Sacramento–Roseville–Folsom metro area slipped 2.4% to $599,990.

Experts said, “Affordability weakened significantly as still-high interest rates, inflation, soaring home insurance premiums, and high condo association fees hit at the same time,” and added, “Seasonal factors also appear to have played a larger role.”

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