Home prices are continuing to fall around the Bay Area, and it looks like the trend will continue into the new year.
However, the drop in prices is still leaving much to be desired for homeowners.
"We are experiencing a housing affordability issue," said Oscar Wei, economist with the California Association of Realtors.
According to the association, higher interest rates, inflation and layoffs are just some of the reasons why sellers are making less on their homes.
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"Cost of borrowing has been increasing around 30% to 40% higher than the early part of the year," Wei said. 'That is why we expect prices to slow down."
Home prices are expected to drop by 8.8% next year in California, but that doesn't mean people are rushing to buy a home.
Orphe Divounguy, a Zillow senior economist said prices are falling out but not as much compared to how they have increased during the pandemic.
Making It In The Bay
Zillow estimates the San Francisco metropolitan area will see a 3.6% decline in home values in the coming months, and even though prices have been dropping for several months, home buying has stalled.
"We weren't expecting it to be quite so dramatic, but it is starting to hit a little bit right now," explained Tim Yee, president of Re/Max Gold Bay Area. "We expect the market to come back some time toward the middle or the end of next year."
Experts said that a drop in prices will also have to come with lower interest rates to really jump-start the local market.
