The median home price in San Francisco fell by 5.1% in December compared to the year before, making it the steepest decline among 53 US cities, according to a real-estate report.
Los Angeles saw the second-biggest decline line median home prices last month. LA's median price slipped 4.7% to $810,000 from $850,000, the study said.
Western cities rounded out the top five of metro areas with a median price decline. Honolulu, Seattle, and Phoenix occupied the next three spots on the list.
Besides San Francisco's price drop, the study also found that the city by the bay has fewer homes closing above list price than a year ago, In December 2021, the closing prices for San Francisco homes averaged out to be 107% of list prices. Last month, average closing prices were 99.1% of asking prices, RE/MAX said. This was the biggest decline in this metric, suggesting that buyers are making deals without having to bid high over the list price, which had been common for years.
Rising interest rates, however, can be a deterrent to would-be home buyers. The Fed has repeatedly raised interest rates to tamp down on inflation, but one of the side effects is that the higher rates mean that borrowers get hit with larger mortgage payments.
The stats from RE/MAX are consistent with a downward trend in Bay Area home prices that was spotted earlier in 2022.
San Francisco and Los Angeles were previously identified by Redfin as the two cities that had the biggest exodus of homeowners.