California’s housing market is cooling off faster than any other US state, even though it’s still really costly to buy a home there

Note: This story was originally posted by by Alcynna and Madison Hoff on December 3, 2022.

Housing affordability tanked in California this year. But the state’s stratospherically-high home prices have also led to it witnessing some of the biggest drops in median sale prices since much of the US housing market peaked earlier this year.

Indeed, data provided to Insider from Zillow shows that California has more cities in the list of the top metros with the biggest drop in sale prices than any other state.

According to the stats, San Francisco, San Jose, San Diego, Los Angeles, Sacramento, and Oxnard (which is located near Ventura) have all seen home prices fall more than 5% from their peak values earlier this year. Additionally, Stockton has seen its median sale price drop 4.8% from its peak. That brings California’s total to seven metros out of the top 20 for the nation that have seen the most severe drop in housing prices.

The abundance of California’s cooling markets perhaps isn’t too surprising when considering that it’s one of the most expensive housing ecosystems in the country — a situation that had only gotten worse as rising mortgage rates weighed on wallets and buyers’ purchasing power through much of 2022. 

In separate data from the California Association of Realtors that highlights the third-quarter of 2022, the state’s median home price was $829,760 for the period, a steep 48% increase over the typical US home price of $398,500. In other words, with the state’s median income for a 4-person household being $98,644, only 18% of households in the state could afford the cost of a typical California home. 

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