California's housing market showed a glimmer of relief at the end of 2025, with home prices falling in 88% of the state's largest metropolitan areas. A review of Zillow data for 125 major US cities found that only two California metros – Visalia and Fresno – saw price gains, while all others saw declines.
The modest dip in housing values is a welcome respite for would-be homebuyers who have been bracing themselves for more significant price drops in recent months. Stockton's prices were down just 4% last year, compared to a 36% drop over the previous four years and an increase of 2% in 2024.
The latest decline is a reminder that housing markets are inherently cyclical, with values often dropping during economic downturns. California's situation is being driven by factors such as a wobbly economy and high mortgage rates, which are scaring off some potential buyers.
While the soft pricing may offer hope for budget-strapped house hunters, it's essential to note that many metros still saw significant price drops. Zillow's statewide index fell 2% last year, compared to a 38% increase over the previous four years.
Some other California metros with notable declines include Santa Rosa, San Francisco, Inland Empire, and Sacramento, all of which saw price drops ranging from 2% to 3% last year.
The modest dip in housing values is a welcome respite for would-be homebuyers who have been bracing themselves for more significant price drops in recent months. Stockton's prices were down just 4% last year, compared to a 36% drop over the previous four years and an increase of 2% in 2024.
The latest decline is a reminder that housing markets are inherently cyclical, with values often dropping during economic downturns. California's situation is being driven by factors such as a wobbly economy and high mortgage rates, which are scaring off some potential buyers.
While the soft pricing may offer hope for budget-strapped house hunters, it's essential to note that many metros still saw significant price drops. Zillow's statewide index fell 2% last year, compared to a 38% increase over the previous four years.
Some other California metros with notable declines include Santa Rosa, San Francisco, Inland Empire, and Sacramento, all of which saw price drops ranging from 2% to 3% last year.