The typical home in El Dorado Hills sold for $866,232 over the three months ending in May, down 5.6% from $917,500 in the same stretch a year earlier, according to newly released data from Redfin. The decline marks a notable softening in one of the Sacramento region’s priciest suburbs, where median prices had hovered closer to $900,000 in each of the past two springs.

Prices ease while buyers show up

The year-over-year price drop comes even as buyers returned to the market in larger numbers. Closed sales totaled 223, up 11.5% from the 200 homes sold in the same period last year and 16.1% above the three months ending in April. New listings rose more modestly, climbing 4.8% from a year ago to 348.

Median price per square foot tells a similar but milder story, slipping 1.1% to $362 from $367 a year ago. The gap between the two figures suggests that while buyers paid slightly less per square foot, much of the headline decline reflects a shift toward smaller or differently configured homes changing hands.

Stepping back further, the median sale price remains below where it stood two years ago, when homes in El Dorado Hills typically traded for $927,500. Compared with the spring of 2021, prices are up just 0.8% over five years — a striking flatline for a market that, like much of California, saw rapid appreciation during the pandemic before giving much of it back.

Inventory builds, but the market still favors sellers

Active inventory reached 486 homes, up 5.2% from a year ago and 9.9% from the prior month — typical movement for a market heading into peak spring. At the current sales pace, that works out to roughly 2.2 months of supply, still firmly within the range that economists consider a sellers’ market.

Other indicators point the same direction. Homes took a median of 19 days to find a buyer, unchanged from last May and three days faster than the 22-day pace seen a month earlier. Nearly 30% of homes sold above their asking price, a slight uptick from 28.5% a year ago, and the typical sale closed at 99% of list price. In short: prices have softened, but well-priced homes are not lingering.

What lower prices and rates mean for buyers

The combination of falling prices and easing mortgage rates has meaningfully changed the math for buyers. The 30-year fixed mortgage rate averaged 6.44% in May, down from 6.82% a year earlier, according to Freddie Mac. A buyer purchasing today’s median-priced El Dorado Hills home with 20% down would face a monthly principal-and-interest payment of about $4,353 — roughly $442 less per month than the same purchase would have required a year ago.

Even so, affordability remains stretched. The median home now costs about 5.2 times the area’s median household income of $165,349, according to the U.S. Census Bureau, and the typical monthly payment consumes roughly 32% of median household income — at the upper edge of what lenders and housing economists consider manageable.

El Dorado Hills, with a population of about 51,000, continues to command prices well above most of the Sacramento region. Nationally, the broader picture has been steadier: the S&P/Case-Shiller U.S. National Home Price Index was essentially flat compared with a year ago, suggesting El Dorado Hills’ price decline is running counter to the national trend rather than reflecting it.

Spring momentum

The month-over-month picture reinforces the sense of a market finding its footing. Sales jumped 16.1% from the three months ending in April, new listings rose 11.9%, and the median time on market shortened by three days. Some of that pickup is the usual spring acceleration, but the scale of the sales increase — paired with a small dip in the median price from $872,500 a month earlier — points to buyers responding to the combination of more choice and lower borrowing costs.

For now, El Dorado Hills sits in an unusual middle ground: a sellers’ market by the standard supply yardstick, but one where sellers can no longer count on the price growth that defined the early 2020s.