The current real estate market in the United States is relatively sluggish, with buyers seemingly having the upper hand. In the hot California housing market, both home sales and prices are on the decline.
The California Association of Realtors (C.A.R.) released its latest report on Wednesday, indicating that statewide home sales in California in January were down by 10.8% compared to December last year, hitting the lowest level since May 2025. Sales in the San Francisco Bay Area, Central Coast, and Southern California regions all saw moderate annual declines.
At the same time, the median home price in California in January was $823,180, dropping to its lowest point in 23 months and showing the largest annual decline since June 2023.
The report suggests that the decline in home sales in California reflects the continued soft market trends of the past few years. Recent fluctuations in mortgage interest rates have also dampened the enthusiasm of homebuyers. However, the good news is that the month-to-month increase in the number of homes for sale is higher than in previous years, and the total active listings have been increasing for 24 consecutive months since January 2025.
C.A.R. President Tamara Suminski stated, “With mortgage rates falling to recent lows, it is expected that housing supply will improve in the coming weeks and may gradually rise as we enter the peak spring buying season.” She believes that the specific direction of the California housing market will mainly depend on whether interest rates continue to decrease in the coming months and whether the economic situation becomes clearer.
While home prices in California fell in January, they still remain higher than the national average, with significant price discrepancies across different regions.
Data shows that the median home price in the Los Angeles metropolitan area is $808,000, around $1.09 million on the Central Coast, and approximately $1.13 million in the San Francisco Bay Area.
Looking at the county level, the most expensive areas in the California housing market are San Mateo County on the San Francisco Peninsula, with a median price of $2 million in January; Santa Clara County around $1.807 million; San Francisco County approximately $1.65 million. Orange County in Southern California is at $1.41 million, and San Diego County at $1.05 million.
However, in the northwest county of Trinity County, the average median home price in January was only $270,000, while Lassen County in the far north was $255,000.
As the housing market gradually shifts towards a buyer’s market, buyers are expected to receive discounts on home purchases. According to a report by real estate brokerage Redfin, homebuyers in 2025 received the largest discounts in 13 years – an average of 7.9%. Nearly 62% of all buyers paid below the listing price. This trend may continue into 2026.
However, discounts vary across regions. In major metropolitan areas such as San Francisco, San Jose, and Oakland, buyers on average paid prices above the listing price.
On the other hand, the Redfin report found that condo buyers actually received larger discounts, with an average discount of up to 8.1%, while townhouse buyers received an average discount of about 6.5%.
Redfin Chief Economist Asad Khan stated that by 2026, buyers may not need to rush to give up on houses slightly above their budget, “because it is possible to obtain some form of concession from the seller, including price reduction, assistance with transfer costs, or discounts on repair costs.”