Will Home Prices Drop in California? 2025–2026 Housing Market Outlook
California’s housing market has long been one of the most expensive—and most closely watched—in the nation. With interest rates staying elevated and affordability at historic lows, many buyers and investors are asking the same question: When will home prices drop in California?
Let’s take a closer look at what’s happening in the market right now, what experts predict for 2026, and what signs to watch for if a correction is coming.
🏡 Current California Housing Market Overview (2025)As of fall 2025, California’s median home price remains near $840,000, according to data from the California Association of REALTORS® (C.A.R.). While that’s down slightly from the 2022 peak, prices have been relatively stable throughout 2024 and 2025.
Here’s what current data shows:
Zillow reports that California’s average home value dipped 1.7% year-over-year statewide. …