Spring in Davis usually means bidding wars and stretched budgets, but the three months ending in April delivered something less familiar: a meaningful price cut. The median sale price came in at $765,355, down 6.1% from $815,000 a year earlier, according to newly released data from Redfin. Combined with a slightly lower mortgage rate, that translates to roughly $414 less in monthly principal and interest on a median-priced home than buyers faced last spring — about $3,802 a month now versus $4,216 then, assuming a 20% down payment.

The dip is notable in a city of about 66,000 residents where the housing supply has long struggled to keep pace with demand from University of California staff, students’ families, and commuters to Sacramento. Population grew just 0.4% over the past year, but with only 28,578 housing units in the city, even modest demand shifts move the market.

Prices cool, but competition hasn’t

The headline price decline doesn’t tell the whole story. The median price per square foot fell only 3.6% year-over-year, to $481 from $499, suggesting buyers tilted toward somewhat smaller or less expensive homes rather than the entire market resetting downward. And 42.0% of homes still sold above their list price, up slightly from 39.8% a year ago. The sale-to-list ratio held at 100.2%, meaning the typical home in Davis still closed just above asking.

Homes also moved faster. The median time on market was 10 days, down from 12 days a year ago and 15 days in the three months ending in March. That matches the pace seen two years ago and five years ago — Davis listings have consistently cleared in about a week and a half during spring markets.

Inventory edges up, sales edge down

Active inventory reached 216 listings, up 2.9% from a year earlier and up 15.5% from the prior month — the latter a typical seasonal increase as sellers list ahead of summer. New listings totaled 168, modestly above the 160 logged a year ago.

Sales, however, slipped. Buyers closed on 90 homes, down 12.6% from 103 a year earlier, though up 38.5% from the slower three-month window ending in March. That seasonal jump is expected; the year-over-year decline is the more meaningful signal.

With 216 active listings and 90 sales, Davis has about 2.4 months of supply — still firmly in sellers’-market territory, where buyers face limited choice. For comparison, inventory two years ago stood at just 148 listings, so today’s market offers somewhat more options than it did then, but conditions remain tight.

Affordability stays stretched

Even with prices easing, Davis remains an expensive place to buy. The median sale price is roughly 8.5 times the city’s median household income of $90,045, according to the U.S. Census Bureau’s American Community Survey — well above the 5x threshold economists typically associate with affordability strain. The estimated monthly payment on a median-priced home would consume about 50.7% of median household monthly income, above the 43% ceiling the National Association of Realtors uses to define affordable.

Mortgage rates have helped at the margin. The 30-year fixed averaged 6.33% in April, down from 6.72% a year earlier but up from 6.18% in March, according to Freddie Mac data published by the Federal Reserve. The 15-year fixed averaged 5.68%. Nationally, the S&P/Case-Shiller U.S. National Home Price Index was essentially flat year-over-year, suggesting Davis’s price decline runs counter to the broader national pattern of modest gains.

The longer view

Stepping back, Davis prices remain close to where they were two years ago, when the three-month median stood at $812,500. Compared with the same period five years ago, when the median was $723,500, prices are up 5.8% — a far slower pace than the run-up many California cities saw during the pandemic years. Sales volume, at 90 homes, sits below the 104 closings recorded in spring 2021 and the 103 from a year ago, pointing to a market where activity has narrowed even as competition for individual listings remains sharp.