Put together high mortgage rates, tech layoffs, and an uncertain economy and it all adds up to falling home prices in the Bay Area.

To be specific, the median price of existing single-family homes in the Bay Area stood at $1.08 in December 2022, an 11.5 percent reduction from November and a decrease of 9.6 percent from December 2021.Both of these declines were the largest in California.

As home prices continue to decline – currently down 6 percent since May – and mortgage rates continue to rise – currently over 7 percent and doubled since January – how close are we to where the two balance each other out? According to experts – not very.

IOn San Francisco and San José, for example, prices would have to drop an additional 10 percent to reach May’s monthly payments.

On the other hand, many Bay Area cities had very high prices before the pandemic, so they would have to fall less than 10 percent. But prices would still remain very high!

Even with the pandemic and struggling economy, Bay Area home prices rose 13 percent in December from the the previous year with the median price sitting at a cool $935,000. Contra Costa homes rose 18 percent to $725,000 while Alameda County saw median home prices at over $1 million for the sixth consecutive month.

Continued low interest rates coupled with slim inventory and high demand are driving up prices, according to analysts. Most don;t see the situation changing anytime soon.

With all the economic uncertainty, the one area that continues to thrive is Bay Area real estate. According to the latest report from DQNews data, the median sale price for an existing single-family home in the Bay Area is $975,000, marking a 16 percent increase from 2019.

Once again, these numbers are driven by the limited number of properties for sale and the relatively large number of high-end homes for sale.

Nationally, prices increased by close to 14 percent and are nearing their peak. But not the Bay Area, where prices are projected to continue to rise by as much as 7.8 percent.

Driven by huge surges in homes priced above $2 million, Bay Area homes increased 14 percent year over year in November. Competition for homes remained intense with seven fewer days on the market year over year.

However, a shortage of inventory continued with the number of homes for sale down 2 percent over November 2016.

Analysts also speculated that proposed tax changes in Congress and uncertainty over homebuyer deductions also played a prominent role in the November surge.