Finally, California home prices are starting to drop. But not by much

The median price of a single-family home in California dipped to $811,170 in July, a minor shift from the month before in what could be the start of a cooling off period in a booming market.

The latest number is a 1% drop in median price from June, according to a Monday report from the state’s Department of Finance.

That’s still 21.7% higher than in July 2020.

The latest update also represents the fourth consecutive month that median prices in California were above $800,000.

The decline could foreshadow a slight leveling off in California’s pandemic-hot housing market.

Sacramento-area prices are similarly dropping for the first time in more than a year. In Sacramento County, the median price dropped $10,000 from June to $510,000 in July, according to the Sacramento Association of Realtors. Numbers have also leveled or dropped off in El Dorado, Placer and Yolo counties.

Data collected by the California Association of Realtors similarly show that “sales remain solid but the momentum continues to slow.” Seventy-percent of homes still sold above the asking price and listings continue “flying off the shelf,” according to the association.

Recent reports also indicate the same trends might be happening nationally, though the demand for homes still outpaces the supply.

“The market is slowing, but it’s not dull. It is still really competitive,” Sacramento appraiser and housing market analyst Ryan Lundquist wrote in an Aug. 11 blog post. Lundquist said it’s natural for the market to evolve, and that what “we are seeing what looks to be a normal seasonal slowing.”

Last month, California recorded 428,980 existing single-family home sales, a 1.6% decrease from June and 2% from July of 2020.

Lawmakers in Sacramento have pushed legislation this year to spur housing construction in California in hopes to increase density and lower prices. On Monday, the Assembly narrowly approved Senate Bill 10, a measure that would let cities plan for small apartment buildings with up to 10 units in jobs- and transit-rich areas that traditionally bar multi-family projects.

The bill is part of a larger list of proposals that Senate leaders have prioritized after several years of slow momentum on pro-production housing laws. Another high-profile effort, Senate Bill 9, would let home owners more quickly build duplexes on their lots.

Most of the Senate’s proposals have not yet passed into law.

This story was originally published August 24, 2021 at 5:00 AM.