The median single-family home price in California dropped to $821,680 in September which is a decline of 2.1 percent from August and down 8.7 percent from the peak in May. Of course, these numbers are relative and this decline is still up 42 percent from February 2020.

In the Bay Area, the median in September is $1.26 million, down 0.5% from August and a whopping 16.5 percent from May, but still up 38 percent from February 2020.

As for the future, the California Association of Realtors predicts a drop of 9 percent in the median price statewide for all of 2023.

The National Association of Realtors recent release of April’s housing data shows that nationwide the supply of houses for sale increased by 1.4 percent over March and 5.8 percent over March 2018. However, even with more inventory sales declined 0.4 percent from March, marking the 14th consecutive month of declining sales.

Several large markets saw a decline in prices as well, lead by Seattle where values dropped by 4.5 percent over the previous year.

Other top markets which have seen a significant cooling since February include San Jose, San Francisco, Los Angeles, and Portland. Meanwhile, the overall housing supply in these areas is up 40.2 percent year over year.

Call it the law of supply and demand – or, in this case, the law of extremely limited supply and excessive demand – but, once again, prices in the nine-county Bay Area have risen to extraordinary new levels.

Santa Clara County saw the largest gains with home prices increasing by nearly 25 percent(!) over 2017 with a median price of $1.308 million. Alameda County homes rose 11.8 percent with a median price of $900,000 and Contra Costa County rose 10 percent to $649,000.

Interestingly, the number of homes for sale this April actually increased by 7 percent over a year ago. Nevertheless, the total home sales in April were nearly 16 percent below the historical average..

According to the California Association of Realtors, home prices in the nine county Bay Area experienced a 12.2 percent year-over-year increase with a median price at $784,470 as of the end of February. The same Bay Area counties currently has a 3.0 month supply of inventory, an increase over January but down from February 2016.

Statewide, the number of active listings declined by 13.9 percent in February and continues a downward trend for the last 20 months or so.

Analysts predict the inventory level will continue to decline although the recent Federal Reserve statement that rates will probably rise two more times in 2017 may spur a short-term surge of activity as buyers and sellers try to beat the impending mortgage rate increases.

Buy, buy, buy. Up, up up.

The National Association of Realtors reports that sales of existing home rose by 5.1 percent in May to a seasonally adjusted annual rate of 5.35 million, marking the third consecutive month of the sales rate’s exceeding five million homes on an annual basis, moving home-buying on a pace for the the best year since 2007.

Moreover, median home prices have risen 7.9 percent over the last 12 months to $228,700, about $1,700 less than the July 2006 peak.

Why? Analysts cite a stronger job market, decent rates, and the anticipation of prices going even higher.

First-time buyers accounted for 32 percent of April’s sales, up from 27 percent in 2014. Nevertheless, it is still far behind the historical average of 40 percent.

As for the rest of the year, experts will watch just how much higher prices will climb – which might price many out of the market – and the much-anticipated increase in interest rates.