Home Prices Fall As CA Housing Market 'Rebalances'

CALIFORNIA — Home prices continued to cool in September in California and across the country, reflecting market headwinds, according to property data website CoreLogic.

Home prices fell by 0.1% nationally from August to September, according to the CoreLogic S&P Case-Shiller Index released this week.

September marked the sixth consecutive month of slowing annual appreciation. The CoreLogic S&P Case-Shiller Index slowed to a 3.9% year-over-year gain after peaking at 6.5% in both February and March of this year.

"Home price appreciation weakens further into fall as soft homebuyer demand and a rebound in mortgage rates continue to challenge housing markets and affordability," CoreLogic Chief Economist Dr. Selma Hepp said.

The decline in seasonal home prices were driven by cooling California markets, according to the report. Month-over-month home price declines were led by three markets in California: Los Angeles, San Diego and San Francisco, all of which recorded a 0.9% drop in September.

"Over the course of 2024, areas in the Midwest continued to see strong appreciation while those in California, which started off relatively strong, had cooled notably by September," the report states.

"Affordability remains considerably more limited in California markets despite these markets seeing a notable increase in for-sale inventories. Interestingly though, while there has been an increase in the share of California homes selling for less than the asking price, the median price reduction remained steady over the course of the year, hovering at about 4.7%."

Additional cooling is expected through the middle of next year before home price growth picks up again, according to the report. That's positive news for prospective homebuyers, Hepp told Patch.

"Stalling of home price appreciation is in many ways a welcome trend given how difficult is for young families to achieve homeownership in California," Hepp said. "In addition, increase in for-sale inventories is also a positive trend as it suggests more options for homebuyers and lessened competition. In the year ahead, we are likely to see further rebalancing in the housing markets in California and slower home price appreciation than we saw over the last year, averaging about 1% to 2%."