California home prices fell to their lowest level since February 2024, signaling cooler conditions as the 2026 housing market begins.
The statewide median price for existing single-family homes dropped to $823,180 last month. That figure reflects a 3.2 percent decline from December and marks the largest year-over-year decrease since June 2023.
The latest data indicates the median price has now declined annually in three of the past four months. Market analysts point to moderating buyer demand and elevated inventory levels as key factors driving the shift.
Price Trends Reflect Cooling Competition
The recent dip places California home prices at a 23-month low. Competition among buyers remained subdued at the start of the year, limiting upward pressure on values.
Housing supply has improved compared with prior years, when limited inventory fueled rapid price growth. More active listings have given buyers greater leverage in negotiations.
At the same time, demand has moderated as higher borrowing costs and affordability challenges continue to shape purchasing decisions. Fewer bidding wars and longer days on market have become more common across many regions.
These combined conditions have placed downward pressure on the statewide median. Analysts describe the shift as gradual rather than abrupt.
What The Decline Means For The San Gabriel Valley
For communities in El Monte, South El Monte, Baldwin Park, Rosemead, Arcadia, Temple City and Irwindale, statewide trends often provide a useful benchmark.
A softer statewide median does not mean every local market will experience identical declines. Home values vary by neighborhood, school district and housing type. Still, the broader slowdown in competition may offer relief for buyers who struggled during peak pandemic-era conditions.
Sellers may need to price more strategically and prepare homes carefully to attract serious offers. Accurate pricing and realistic expectations will play a larger role in closing transactions.
Toward A More Balanced Market
Housing economists suggest the decline signals a transition toward more balanced supply and demand conditions. Elevated inventory levels continue to weigh on prices, while moderating demand tempers rapid appreciation.
A balanced market typically features steadier price movement and fewer extreme swings. Buyers gain more options, and sellers adjust to market-based pricing rather than multiple-offer scenarios.
While the statewide median has fallen, prices remain historically high. The current level of $823,180 reflects long-term appreciation despite recent softening.
For Mid Valley residents, the latest numbers underscore a housing market in transition. As 2026 unfolds, local buyers and sellers will watch closely to see whether price stabilization follows this early-year decline.
