Northern California’s housing market is showing stronger early signs of recovery compared to Southern California, with some parts of the Bay Area seeing stronger buyer competition, a recent study has revealed.
According to Zillow’s April 2026 market report, new listings nationwide grew faster year-over-year than home sales, with active inventory increasing by 3.7% from April 2025.
While the housing market’s recovery in April is more of a divided scenario in California, the northern part of the state, especially San Francisco and the nearby markets in the Bay Area, showed more resilience than Southern California metros.
Housing Market Recovery in Northern California
According to Zillow, some cities in Northern California recorded the highest monthly appreciation of home values compared to their Southern California counterparts.
San Francisco recorded the highest rate of monthly appreciation in April. With a typical home value of $1.13 million, home value rates improved 1.1% month-over-month. San Francisco’s housing market recovery rate was the highest among all other California metros listed by Zillow.
Sales count change in San Francisco grew by 8.5% YOY, while rent increased by 6.5% YOY.
Data suggests that buyer demand is strengthening in many Bay Area cities.
In San Jose, the hub of Silicon Valley, home values increased by 0.5% month-over-month, with the typical home value totaling $1.60 million. Total sales of homes in the city, however, fell a little over 1% from 2025, while rent increased by 5.1% YOY.
In the capital city of Sacramento, home values appreciated by 0.5% from the previous month, with the typical home value totaling $578,575. The total home sales count surged by 5.9% from the previous year, while rent increased by nearly 2% from 2025.
Subdued Activity in Southern California
On the other hand, housing market recovery in Southern California appeared to be softer, according to Zillow.
The populous city of Los Angeles reported a 0.6% improvement in home value change in April compared to March, while sales count declined by 0.5% YOY. The typical home value totaled $964,097.
In the coastal city of San Diego, home values improved by 0.7% month-on-month, with the typical home value totaling $938,900. While sales count improved 2.4% from the previous year, rent improved by 1.5% YOY.
The inland city of Riverside also reported a similar pattern of slight increases in housing activity. Home values increased only by 0.3%, with the typical home value standing at $584,732.
Sales activity dipped in the city, declining by 2.7% from last year, while rent increased by just 2% YOY.
Despite housing some of the state’s largest housing markets, the overall housing market pattern in Southern California suggests slower buyer activity.
Broader National Trends
Across the U.S., new listings increased by 2.1% from the previous year to total over 426,000 in April 2026, according to Zillow.
Home sales, however, remained flat, down 0.4% YOY. The typical home value in the U.S. stood at $366,712.
A total of 1.3 million homes were listed for sale in April, with the active inventory climbing by 5.8% from March.
There were slightly improved market conditions in April favoring buyers.
Even with the recent hike in mortgage rates, buyers who waited to enter the market this spring are venturing with better terms and more options, improved affordability, and a bit more time to weigh options.
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