Houses in California tend to be expensive, but one city is seeing a significant decline in home prices, according to a study from Realtor.com.
The real estate listing website released a study detailing where home prices are dropping after potential buyers saw high prices during June. The study analyzed 100 metropolitan areas across the country to see where prices declined the most.
The percentage change a city’s housing market experienced since June determined its ranking.
Stockton, located in San Joaquin County in Northern California, was ranked as the 8th city to experience notable home price reductions. According to the website, the median home price in Stockton is $581,725, a 7.7% decrease from home prices in June.
Many home buyers from California, most notably in San Francisco, sold their houses during the pandemic and used that money for cheaper real estate in neighboring areas, the study found. The influx of people in those surrounding areas caused home prices to increase significantly.
Now, record high inflation has resulted in higher mortgage rates which has decreased the number of eligible buyers who can qualify for a home loan. This has also reduced the prices of homes still on the market, the study said.
Adrian Rosas, a real estate agent with HomeSmart PV & Associates in Stockton, told Realtor.com that a house sale of $400,000 fell through twice due to this trend. The sellers took off an additional $20,000 to make the price seem more attractive for potential buyers, after initially lowering the price by $10,000.
Even though prices are decreasing, home prices in Stockton have increased by 7.3% since September 2021, the study found.
Austin, Texas was ranked as the number one city experiencing declines in home prices. The median home price in the city is $558,275, which is 10.3% lower than where it was in June. Since September 2021, home prices in Austin have increased 2.2%.
Phoenix, Arizona ranked second on the list.
Spokane, Washington was ranked 10th in the study. The median home price in the area is $449,900.
The area saw a 7.4% price decrease since June.