Yes, Stanislaus home prices have dropped. But are they still higher than prepandemic?
As ongoing inflation and rising mortgage rates continue to rile the local housing market, it might be tempting to think all pandemic gains have been lost in Stanislaus County.
While median home sale prices have dropped since their high of $485,000 in April of this year, according to statistics from the California Association of Realtors, they still remain more than $100,000 higher than the median sale price before COVID-19 became a global crisis.
The association reports the median sale price (meaning half the homes sold for more and half for less) at $445,000 for single-family homes in the Modesto area this September. That is down from $460,000 in August, a drop of $15,000.
Since June, when the Federal Reserve began aggressively increasing its key interest rate by three-quarters to fight historically high inflation, home prices have begun to cool as corresponding mortgage rate increases begin to price people out of the market.
Experts forecast most of the year’s sale price gains will be given back as sellers drop their prices to attract buyers who now face higher monthly payments. According to the association’s data, median home sales in the county were at $440,000 in December 2021. They currently sit just $5,000 above their end-of-2021 median, and could be poised to go lower.
But the gains since the pandemic remain strong and would require a significant adjustment to return to pre-COVID levels. In December 2019, median home sales in the county were $335,000. Starting in February 2020, when the pandemic was emerging internationally, home prices jumped to $339,000 and have steadily risen (with only one month before this year’s high when they did not stay steady or make gains).
While median home sale prices have dropped 8.3% from their April peak this year in the Modesto area, they remain 32.8% higher than in the prepandemic days in December 2019.
Meanwhile, mortgage rates, which were around 3.2% in July 2021, are now around 7%. That has priced some buyers out of the market.
Neighboring counties have seen a similar cycle in their median sale price data as well, according to the association.
▪ In San Joaquin County, September’s median home sale price was $515,000, a drop of some $45,000 from the pandemic high point of $560,000 in May this year, or about an 8% decrease in prices. But median sales still are significantly up from before the pandemic, when the county’s prices were at $391,500, for an increase of about 31.5%
▪ In Merced County, September’s median home sale price was $377,000, a dip of some $37,250 from their pandemic high point of $414,250 in May of this year, or about a 9% decrease. But median sale prices are still up from prepandemic, when the county’s prices were at $282,950, for an increase of about 33%.
Across California, the statewide median selling price for a single-family home was $821,680 in September, according to the California Association of Realtors. While those numbers are down from this year’s peak median statewide sale price of $900,170 from this May, it is still 44.2% higher than the prepandemic statewide median in December 2019 of $575,160.
