23 California Cities where prices are actually dropping

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23 Housing Markets Where Prices Have Fallen

So, which California cities are experiencing a drop in home prices? We’ve mentioned a few of them above. But that’s just the tip of the iceberg.

The list below is based on data provided by Zillow in late September 2019. The percentage beside each city shows how the median home value changed over the previous 12 months. That’s according to the company’s proprietary “Home Value Index.” Bolding indicates cities where home prices have dropped by double digits in the past year.

Year-over-year price drops in California housing markets:

  1. Berkeley: -3.0%

  2. Concord: -1.9%

  3. Cupertino: -11.5%

  4. Fremont: -3.4%

  5. Gilroy: -7.9%

  6. Hayward: -2.4%

  7. Healdsburg: -6.6%

  8. Irvine: -1.9%

  9. Los Altos: -11.6%

  10. Martinez: -1.7%

  11. Mendocino: -8.4%

  12. Milpitas: -10.7%

  13. Mountain View: -8.9%

  14. Palo Alto: -12.3%

  15. Pleasanton: -4.9%

  16. Redwood City: -5.3%

  17. San Jose: -9.3%

  18. Santa Barbara: -3.1%

  19. Santa Clara: -13.2%

  20. Santa Rosa: -1.4%

  21. Saratoga: -11.9%

  22. Sunnyvale: -14.5%

  23. Walnut Creek: -1.0%

Statewide, Values Are Still Climbing

To be clear: These are not the only California cities where home prices are dropping in fall 2019. There are others as well. But it does give you a sense of what is happening across the state.

It’s also important to point out that prices are still climbing in most cities across the state. The housing markets above are an exception to that overall trend.

Interesting.  Would have never guessed this was happening as of yet.   Thanks for the post.

My SF Bay Area backlog of preapproved FHA buyers is starting to have their offers stick much more frequently, including in Oakland (a year or two ago, I rarely did an FHA loan, since the offers rarely got accepted). FHA is no longer an automatic deal breaker in the eyes of listing agents and sellers, though 3-4 unit properties at MLS prices still don't pass the FHA self-sufficiency test. A year ago I might do 1 FHA loan every 2-3 months, right now I have 6 FHA purchases in escrow... good news if 3.5% down plus closing costs is what you've got to get started with.

Listing agents and sellers are caving to requests a little more, things like rent backs. Bluffs are starting to be called out for what they are.

Buyers should be careful that they do not overplay their hand, however. Multiple offers are still the norm, and you will not be taken seriously if you try to party like it's 2010 in the Midwest. Bay Area Realtors repping buyers, keep your clients from going too crazy with this information + all the other news articles hitting those Facebook feeds, or they will lose out on the deal entirely. 

It's highly unlikely we will see a return to 2008 or 1929. And, indeed, those two events were 79 years apart. 2008 was only 11 years ago and my average client's FICO score these days is up in the mid-700s, we're doing low DTI conservative full doc 30YF (no swaths of people with ARMs about to blow up on them, no liar loans). 4 out of the last 5 recessions, California saw home values stay the same or increase. Overall, I'd expect any value contractions to be concentrated in condos and in the super high cost areas (fastest to go up, fastest to go down - condos and very expensive houses), and it looks like that's mostly how it is playing out on the OP chart too.

Account Closed Negative 12% doesn’t sound so bad when you compare it to the positive 250% we’ve experienced the last 8 years. 

ABB - always be buying 

Originally posted by @Account Closed :

@Account Closed Negative 12% doesn’t sound so bad when you compare it to the positive 250% we’ve experienced the last 8 years. 

ABB - always be buying 

yup your Cupertino house you bought for 895k 7 years ago just fell from 2.2 million to 2. mil.  like all things it only affects those that bought in the last year or so and if they want to exit today.. no matter were you buy if you exit in a year or two your going to lose money.. unless you did some sort of serious value add.

 

Originally posted by @Account Closed :

23 Housing Markets Where Prices Have Fallen

So, which California cities are experiencing a drop in home prices? We’ve mentioned a few of them above. But that’s just the tip of the iceberg.

The list below is based on data provided by Zillow in late September 2019. The percentage beside each city shows how the median home value changed over the previous 12 months. That’s according to the company’s proprietary “Home Value Index.” Bolding indicates cities where home prices have dropped by double digits in the past year.

Year-over-year price drops in California housing markets:

  1. Berkeley: -3.0%

  2. Concord: -1.9%

  3. Cupertino: -11.5%

  4. Fremont: -3.4%

  5. Gilroy: -7.9%

  6. Hayward: -2.4%

  7. Healdsburg: -6.6%

  8. Irvine: -1.9%

  9. Los Altos: -11.6%

  10. Martinez: -1.7%

  11. Mendocino: -8.4%

  12. Milpitas: -10.7%

  13. Mountain View: -8.9%

  14. Palo Alto: -12.3%

  15. Pleasanton: -4.9%

  16. Redwood City: -5.3%

  17. San Jose: -9.3%

  18. Santa Barbara: -3.1%

  19. Santa Clara: -13.2%

  20. Santa Rosa: -1.4%

  21. Saratoga: -11.9%

  22. Sunnyvale: -14.5%

  23. Walnut Creek: -1.0%

Statewide, Values Are Still Climbing

To be clear: These are not the only California cities where home prices are dropping in fall 2019. There are others as well. But it does give you a sense of what is happening across the state.

It’s also important to point out that prices are still climbing in most cities across the state. The housing markets above are an exception to that overall trend.

there was an article today about NYC and high priced NJ  etc.. were sales are WAAAY off and values are coming down.. this one blames it on SALT and luxury tax and other tax burdens.. people are going to tax haven states.. one reason VEgas has been pretty perky these days as well.

 

You also have to be wary of small markets like Cupertino. If you look, it’s down 11% yoy for September, it was up 150k to $2.3mil or plus 12% yoy for August.  How do you make sense of prices going from plus 12% to minus 11% in one month. When you only have 16 sales and 25 active listings, if someone sells a $500k tear down one month and someone else sells their $8 million getaway the next month, numbers are going to sway...a lot...heck, even if a builder does that  

https://sanjoserealestatelosga...

Ps. 23 cities where prices are down? Does that mean 450 cities where prices are up? Seems like a good ratio. (Assuming California probably has about 500 cities.)

@Bill Brandt Prices in Cupertino went up when Apple finished building the “space ship” in 2018 and are now correcting. Average rents went up and has now flattened out. The current plan is for high rise housing and a huge office park where the old mall is being demolished. The City council and the residents in Cupertino are currently fighting over this.

Thank you for sharing this data. I think it's good into to have but some context in terms of units counts, absorption rates, and list vs sale price would give it a little more meaning. Sometimes data like this can be misconstrued or misrepresented when you just say percentage of change.  

@Christine Wolfer

You bring up another good point. What will happen to the $2.2 million average if they start selling A bunch of $1 million condos. (A bunch beint as few as 10) Suddenly the “news” will be 50% price drop in Cupertino. Heck, a 5 plex of $800k condos would destroy the month. 

Originally posted by @Bill Brandt :

@Christine Wolfer

You bring up another good point. What will happen to the $2.2 million average if they start selling A bunch of $1 million condos. (A bunch beint as few as 10) Suddenly the “news” will be 50% price drop in Cupertino. Heck, a 5 plex of $800k condos would destroy the month. 

 That is precisely why median is used in real estate, rather than mean average. 

. @Chris Mason


Exactly, that’s what makes these numbers even more useless. Imagine the 26 sales in August. Number 12 is $2.8mil #13 is $2.2mil and #14 is $1.8mil. If there was one less sale than the median woulda been 30% higher at $2.8, one more sale and it’s 20% lower at $1.8. Medians are easily distorted in small markets/samples.