Home values expected to drop the most in these CA cities, Zillow says. How much?
Home values across California are expected to drop in 2025, according to a recent forecast by Zillow.
The real estate company, which previously forecast a 0.6% increase in home values, now anticipates a 1.9% nationwide drop in its latest Home Value and Home Sales Forecast.
“While mortgage rates are in an especially unpredictable period, barring unforeseen shocks, Zillow expects rates to end the year near 6.5%,” the company said in its April 18 report.
The average 30-year fixed mortgage rate in California was 6.87%, as of Wednesday, April 30.
Why are home values decreasing in California?
“The combination of rising available listings and elevated mortgage rates is signaling potential price drops by year’s end,” Zillow said. “With increased supply, buyers are gaining more options and time to decide, while sellers are cutting prices at record levels to attract bids.”
Though home values are dropping, Zillow expects U.S. existing home sales to rise 3.3% over the year.
Single-family home sales totaled 277,030 in March, according to the latest data from the California Realtors Association. That’s a 2.3% decline from February but a 4.9% increase compared to March 2024.
What does the average California home cost?
In April, the average home value in California was $788,920, according to Zillow.
That’s an increase of more than $10,000 since April 2024.
Where are home values decreasing in California?
In California, home values in one Mendocino County community were expected to decrease the most overall by next March, according to Zillow.
Home values in Ukiah are expected to drop about 9% from $480,126 to approximately $436,915 by March 2016, the real estate company said.
These are the top 10 metropolitan areas in the Golden State where Zillow predicts home values will drop the most between now and March 31, 2026:
- Ukiah: 9% decrease in home value
- Eureka: 7.3%
- Clearlake: 5.5%
Chico: 5.4%
- San Francisco: 5.2%
Santa Rosa: 5.2%
San Jose: 4.8%
Napa: 4.3%
Truckee: 4.2%
Vallejo: 4.2%
With a 9% decrease, home values in Ukiah will drop from $480,126 to approximately $436,915 by next March.
Where are cheapest home prices in California?
According to the California Association of Realtors, the most affordable homes could be found in Northern California in mid-April.
These were six California counties where housing prices were below the statewide average of $788,920, as of April 11:
- Trinity County — $115,000
- Lassen County — $284,000
- Siskiyou County — $285,000
- Glenn County — $335,000
- Tehama County — $360,000
- Lake County — $352,000
Which California counties have most expensive housing?
The Bay Area continues to have the highest prices for existing single-family homes in the Golden State, the Realtors Group said.
That these five California counties had the highest home prices, according to the latest data from the Realtors Group:
- San Mateo County: $2.2 million median sale price for existing single-family home
- Santa Clara County: $2 million
- Marin County: $1.67 million
- San Francisco County: $1.6 million
- Alameda County: $1.3 million
This story was originally published May 5, 2025 at 5:00 AM with the headline "Home values expected to drop the most in these CA cities, Zillow says. How much?."
