Western Home Prices Fall for 9th Straight Month—These Metros Saw the Sharpest Drops

“Go West, young man,” goes the old saying—and it’s more expensive to do so than ever.

For nine months in a row, home prices have fallen in the West.

In December, median list prices in the region fell 1.8% year-over-year, according to the Realtor.com® December 2025 Monthly Housing Trends report.

“Affordability pressures from high mortgage rates and high living costs have weighed on housing demand in the West,” it said. Hannah Jonessenior economic research analyst at Realtor.com.

There are 13 states that make up the Western region: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.

“High borrowing costs continue to limit purchasing power, especially in Western metros that already have high rates,” Jones said. “At the same time, rising commodity prices have eased some of the shortages that were fueling rapid price growth, giving consumers more choice and easing upward pressure on prices.”

The softening of prices has been more pronounced in the West than in other regions mainly because of the high initial price level, according to Jones.

“Many cities in the West, such as coastal cities in California and parts of the Mountain West, entered this period with much higher home values ​​compared to other regions, making them more sensitive to higher interest rates,” he said. “Because of this, consumer resistance has been stronger compared to more affordable regions like the South.”

California is home to three metros with the largest declines

In California, home prices fell year-over-year by 6.7% in San Diego, 5.9% in Oxnard, and 5.5% in San Jose.

“In these California markets, the inability to pay costs has reduced the pool of eligible buyers, reducing demand and reducing pricing pressure,” Jones said.

Southern California agent Marcy Roth Douglas Elliman he says, “In the pockets where we’ve seen declines, I believe that’s a case of the buying spree that occurred during the low interest rate period. Now we’ve seen some of those structures come back, and sellers haven’t broken even or hit a peak.”

Joel Berner,chief economist at Realtor.com, agrees. “Prices are still recovering from this epidemic,” he said. “There were excessive prices in those regions, and we’re just seeing a correction.”

But some sellers haven’t gotten the memo, according to a Northern California real estate agent Tia Hunnicuttfounder of Proxima Realty Group.

“In the San Francisco Bay Area, sellers are oblivious to the price drop and continue to want to sell ‘more than their neighbors did,'” he said.

Phoenix and Denver also took the price

Elsewhere in the West, home prices in Phoenix fell 3.5%, while prices in Denver fell 3.4% year over year in December.

“These markets have driven prices down as inventory growth meets cooling demand,” Jones said.

Phoenix, real estate agent Stacy Miller of Re/Max Fine Properties says investment firms such as BlackRock have bought many affordable homes and converted them to rentals. As a result, first-time buyers of all ages are finding it difficult to find affordable housing in the areas they want, while builders are struggling to keep up with demand.

When builders launch new homes, their incentives are often so attractive that resale properties can’t compete. “This is forcing longer days on the market, less bargaining power for sellers and price reductions, and seller deals being offered to buyers,” Miller said.

Denver real estate Jim Merrion of Coldwell Banker Realty says, “With Colorado being the most expensive state outside of the East and West coasts, our prices, coupled with high interest rates, have greatly hindered consumer activity.”

Merrion says most homeowners have less than 4% interest on their homes, which reduces their desire and motivation to sell. “Buyers see the same houses for sale week after week, so they’re not in a rush to buy, and they often want to offer less than the ask,” he adds.

Denver real estate agent Stacie Staub, The CEO and founder of West + Main Homes, also says the seasonal downturn has something to do with low prices.

“Denver is a city with real seasons, and our real estate market every year reflects this,” he said. “This fall-to-winter has been the same. We’ve experienced a normal seasonal decline as expected, and due to fewer jobs, we’re also seeing a big jump in data, including the median list price as we saw in December.”

Falling prices are moving in the Western states

Some Western states are increasingly feeling the impact of the price drop.

Washington real estate agent Ledeana Strand he says that the softening of the price there does not scare him too much. “We had several years of rapid appreciation, and when mortgage rates went up, consumers became more concerned about making payments,” he said. “Even a small change in prices can have a big impact on what people can comfortably afford each month.”

More listings have come to the market compared to the tighter conditions seen a few years ago, Strand said.

“This gives buyers more choice and less urgency, which naturally puts downward pressure on prices, especially for homes that are undervalued or well-presented,” he said. “Some sellers are still anticipating the market’s highs and testing high prices, while others adjust quickly and price systematically from the start. Homes that hit the market at the right price still move, while overpriced listings tend to stay.”

Nevada real estate agent Robert Little of Re/Max Advantage tells Realtor.com, “Like many markets, buyer demand will decrease when interest rates rise significantly in 2022, but our market is holding up better than most parts of the country.”