“Go west, young man,” goes the old saying—and it’s cheaper than ever.
For nine straight months, home prices in the West have fallen.
According to the Realtor.com® December 2025 Monthly Housing Trends Report, in December, average listing prices in the area were down 1.8% year-over-year.
“Affordability pressures stemming from high mortgage rates and high living costs have weighed on demand for housing in the West,” says Hannah JonesSenior Financial 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 with already high prices,” says Jones. “At the same time, rising inventory has eased some of the slack that previously fueled rapid price growth, giving buyers more choice and reducing upward pressure on prices.”
According to Jones, the softening in prices has been more pronounced in the West than in other regions because of its higher starting price point.
“Many western metros, such as California’s coastal cities and parts of the Mountain West, entered this period with significantly higher home prices than other regions, making them particularly sensitive to higher interest rates,” she says. “As a result, buyer resistance has intensified compared to more affordable regions such as the South.”
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, strained affordability has reduced the pool of qualified buyers, reducing demand and reducing pricing pressure,” says Jones.
Southern California Agent Marcy Roth Co Douglas Elliman says, “Where we’ve seen declines, I believe it’s a case of buying enthusiasm during a low interest rate environment. Now we’ve seen some of those assets come back, and sellers are either barely breaking even or taking a hit.”
Joel Burner, Senior economist at Realtor.com, agrees. “Prices are still recovering from the pandemic,” he says. “There were extreme prices in those areas, and we’re just kind of seeing a recovery.”
But some sellers haven’t gotten the memo, according to Northern California real estate agents. Tia HunnicuttFounder of Proxima Realty Group.
“In the San Francisco Bay Area, sellers are largely unaware of price declines and continue to sell ‘for more than their neighbors are doing,'” she says.
Elsewhere in the West, home prices in Phoenix fell 3.5%, while Denver prices fell 3.4% year over year in December.
“These markets have seen prices soften as rising inventory is coupled with cooling demand,” says Jones.
Real estate agent in Phoenix Stacey Miller According to Ray/Max Fine Properties, investment companies such as BlackRock have bought large numbers of affordable homes and turned them into rentals. As a result, first-time buyers of all ages are struggling to find affordable homes in the neighborhoods they want, while builders are struggling to keep up with demand.
When builders deliver new homes, their incentives are often so attractive that resale properties cannot compete. “This is forcing longer days on market, less negotiating power for sellers and lower prices, and seller discounts to buyers,” says Miller.
In Denver, real estate Jim Marion “Colorado remains the most expensive state outside of the East and West coasts, our prices, combined with high interest rates, have greatly discouraged buyer activity,” says Coldwell Banker Realty.
Marion says most homeowners have sub-4% interest rates on their homes, which reduces their urge and motivation to sell. “Buyers see the same homes for sale week after week, so they’re not in a rush to buy, and they usually want to offer less than asking,” he adds.
Denver Real Estate Agent Stacie Staub, The CEO and co-founder of West + Main Homes also said the seasonal slowdown had something to do with lower prices.
“Denver is a city with real seasons, and our real estate market reflects that annually,” she says. “This decline heading into the winter was no exception. We’ve experienced regular seasonal slowdowns as expected, and with fewer transactions, we also see a big jump in data, including the average listing price we saw in December.”
Other western states are also increasingly feeling the impact of price declines.
Washington Real Estate Agent Ledeana Strand There say the softening of prices does not come as a big surprise. “We had several years of rapid appreciation, and once mortgage rates went up, buyers became aware of paying more,” she says. “Even small changes in rates can dramatically affect what people can comfortably afford each month.”
There are also more listings coming onto the market than the ultra-tight conditions seen a few years ago, Strand says.
“This gives buyers more options and less urgency, which naturally puts pressure on prices, especially for undervalued or poorly presented homes,” she says. “Some sellers still have expectations tied to the peak market and are testing higher prices, while others are adjusting quickly and pricing strategically from the start. Homes that hit the right numbers on the market are still moving, while overpriced listings tend to stay put.”
Nevada Real Estate Agent Robert Little Re/Max Advantage tells Realtor.com, “As in many markets, buyer demand slowed as interest rates rose sharply in 2022, but our market has held up better than many parts of the country.”
