Nationwide, housing markets dipped in 2025, for home prices to end the year roughly where they started.
Of course, all real estate is local and national numbers only represent an average. Some markets have struggled more than others and Zillow projects them to drop further in 2026.
On the West Coast, these cities stand poised for more losses over the next 12 months.
San Francisco
After decades of unsustainable home price growth, San Francisco’s housing market continues languishing. Average property prices remain almost 15% off their all-time high of $1,453,794 in 2022 and Zillow projects prices to drop 2.2% further over the next 12 months.
“Prices surged aggressively during the pandemic, but affordability has completely broken down with today’s interest rates,” said Austin Glanzer, real estate investor with 717HomeBuyers. “Inventory remains elevated compared to demand, which typically means sellers will have to cut prices to move homes.”
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Napa, CA
Less than an hour north, Napa looks similarly overpriced compared to local fundamentals.
The average home costs a dizzying $859,745 and even that represents a 4.2% drop over the last 12 months. Almost seven in ten (68%) of listings are selling below asking price and homes are sitting for 47 days on average before going under contract. Compare that to 29 days for the national average.
Stockton, CA
Stockton has similarly dropped in value by 3.9% over the last year and the next year doesn’t look much better. Zillow forecasts home prices to drop a further 1.2%.
The industrial city has struggled to maintain population and economic growth for decades and the current fragile economy isn’t doing it any favors.
“General economic uncertainty, fluctuations in inflation and a softening labor market all combine for a more cautious approach from buyers and investors,” explained Pavel Khaykin of Pavel Buys Houses.
Sacramento, CA
Don’t expect real estate fireworks in the state capital over the coming year either, with home prices projected to dip 1.0%. That’s after falling 3.3% over the last 12 months to boot.
It suffers from the same overpricing problems as the state in general, with home prices averaging $469,542. But population growth has slowed to a trickle, leaving little to power prices upward.
Portland, OR
North of the state border doesn’t look much brighter, in the real estate market. Portland home prices have fallen 1.5% over the past 12 months and Zillow forecasts them to continue sliding 0.9% over the next 12.
Lesley Hurst, owner of Penn Charter Abstract, sees the housing market recalibrating. “We’re seeing a noticeable slowdown in transaction volume, often the first sign that pricing is out ahead of buyer demand. When activity drops this sharply, sellers usually have to meet the market rather than wait it out,” Hurst added.
Editor’s note: All housing market data was sourced from Zillow.
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This article originally appeared on GOBankingRates.com: 5 West Coast Cities Where Home Prices Are Expected To Crash in the Next 12 Months
