After years of soaring home prices, the U.S. housing market has settled down. Nationally, average home values are little changed from a year ago, according to Zillow. The Federal Reserve data showed that sale prices have fallen by about 7% from their 2022 peak.
That doesn’t mean homes are cheap. Prices remain near all-time highs and have risen by more than one-quarter since the beginning of the decade, according to the Fed. But they are going down — especially in western states
In December 2025, median list prices in the West region fell 1.8% year over year, according to the Realtor.com December 2025 Monthly Housing Trends report.
It was the ninth straight month of declining home values in the West, which includes Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming.
Here’s a look at where prices are declining in the West — and what it means for buyers.
Which Metros Have Seen Prices Drop?
Here are eight major metro areas in the West that have seen home prices decline over the past year, according to Zillow.
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| Metro | Average Home Value (as of 12/31/25) | Year-Over-Year Decline |
| Denver | $524,675 | -4.2% |
| Las Vegas | $420,781 | -2.1% |
| Los Angeles | $923,800 | -2.7% |
| Phoenix | $402,796 | -4.0% |
| Portland, Oregon | $516,539 | -1.5% |
| San Diego | $913,283 | -2.4% |
| San Jose, California | $1,379,464 | -2.8% |
| Seattle | $832,857 | -2.1% |
Not all big Western cities have seen prices head lower. Among those that have seen prices increase over the past year are Albuquerque, New Mexico (up 1.4%); Salt Lake City (up 2.0%); and San Francisco (up 2.1%).
What It Means for Buyers
The one thing buyers need to consider is that each market is different, according to Cari McGee, broker and realtor at Cari McGee Real Estate Team.
“Even if prices are declining across the Western U.S. overall, that’s not the case everywhere,” she said. “Here in the Tri-Cities, for example, prices were up 1.2% last year. In Richland, prices were up 5% and in Pasco prices rose 1.6%. Every market is different.”
Even cities located near each other can be on different trajectories, as evidenced by the fact that prices in San Jose have been declining while those in San Francisco are on the rise.
“With prices decreasing, buyers have more room to negotiate and are not competing with as many offers,” said Mike Bruce, owner of Bruce Homes Colorado. “Declining value feels intimidating but it gives opportunity, especially for those with secure financing and aren’t in a rush.”
How Should You Approach Buying Opportunities?
The one thing house hunters shouldn’t do is be in a hurry to buy just because prices are declining, experts say.
“Buyers should buy when it’s right for them — when they need to or want to,” McGee said. “Trying to time the market rarely works out. But they also need to know that things aren’t like they were a few years ago when home prices were going up quickly. Today, even with modest price gains, you probably won’t be able to resell your home in a year or two and make a profit like you could a few years ago.”
Bruce also warned against trying to time the market.
“Timing the absolute bottom is very difficult,” he explained. “Buying now makes sense if you’ve found a home that fits your long-term needs and your financing is secure. Waiting could bring a modest additional price drop, but you’re risking rising interest rates or losing out on the property you want.”
At the same time, buyers definitely have more leverage than in years past, according to Kris Schatzberg, global real estate advisor at Engel & Völkers.
“Negotiation is back and it’s no longer just about price,” he added. “Seller credits, rate buy-downs, repair allowances and flexible closing timelines are very much on the table with clean, well-structured offers — buyers no longer need to compromise on the things that actually drive value.”
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This article originally appeared on GOBankingRates.com: 8 Metros in Western States Where Home Prices Are Dropping — and What That Means for Buyers
