HUD REGION 9 HOUSING MARKET UPDATE: THE PACIFIC MARKET IS SHIFTING
HUD REGION 9 HOUSING MARKET UPDATE: THE PACIFIC MARKET IS SHIFTING
HUD’s First Quarter 2026 Regional Report for the Pacific Region reveals a housing market that is still holding its value—but clearly losing momentum in several important areas.
Region 9 includes:
Arizona
California
Hawaii
Nevada
Here are the numbers agents should be watching.
REGIONAL OVERVIEW
The Pacific Region’s economy remained stable during the first quarter, but housing activity slowed.
• Employment increased 0.6% year over year to 23.54 million jobs
• The regional unemployment rate remained 5.2%
• Home sales declined 2% to approximately 565,400 sales
• The average home price increased 2% to $822,500
• New-home sales declined 14%
• Single-family permitting declined 14%
• Apartment vacancies increased from 5.3% to 5.7%
Prices are not collapsing, but slower sales, declining construction, softer apartment markets and rising serious delinquencies are creating a market that requires closer attention.
HOME SALES BY STATE
Arizona
• Sales increased 1%
• Average price increased 2% to $541,000
• Population increased 0.9%
• Employment declined 0.4%
• Phoenix apartment vacancy reached 9.0%
• Phoenix rents declined 3%
Arizona continues to attract new residents, but employment weakness and soft apartment conditions could create pressure for rental-property owners and investors.
California
• Sales declined 2%
• Average price increased 2% to $973,100
• For-sale inventory declined 14%
• Population remained nearly unchanged
• Employment increased 0.7%
• Single-family permitting declined 11%
California accounted for approximately 62% of all Region 9 home sales.
The coastal markets generally remained tighter, but conditions varied substantially:
• Los Angeles sales declined 1%; prices increased 3%
• Riverside–San Bernardino sales declined 7%; prices increased 1%
• San Diego sales increased 1%; prices were essentially unchanged
• San Jose sales declined 6%; average price reached approximately $1.85 million
• Sacramento sales declined 3%; prices were essentially unchanged
California’s limited inventory continues to support prices, but declining transaction volume creates challenges for sellers whose properties are vacant, distressed, outdated or difficult to finance.
Hawaii
• Sales declined 5%
• Average price declined 4% to $872,600
• Population declined 0.1%
• Employment declined slightly
• Urban Honolulu sales increased 5%, but prices declined 4%
• Urban Honolulu apartment vacancy fell to 3.8%
• Average apartment rent increased 4% to $2,338
Hawaii was the only Region 9 state where average home prices declined.
Nevada
• Sales declined 7%
• Average price increased 4% to $563,000
• Population increased 0.9%
• Employment increased 2.1%
• Single-family permitting declined 21%
The change was even more pronounced in Las Vegas:
• Home sales declined 9%
• Average price increased 4% to $551,000
• Apartment vacancy increased from 8.0% to 9.5%
• Average apartment rent declined 2%
• Multifamily permitting in Nevada declined 83%
Las Vegas experienced the largest sales decline and the highest apartment vacancy rate among the ten metropolitan markets highlighted by HUD.
THE DEFAULT AND DISTRESS SIGNAL
The share of seriously delinquent mortgages and REO properties in Region 9 increased from 0.7% to 0.8%.
HUD defines a seriously delinquent mortgage as one that is at least 90 days delinquent or in foreclosure.
The regional rate remains below the national rate of 1.2%, so this report does not indicate a widespread foreclosure crisis. However, the direction of the numbers matters.
When sales decline, marketing times lengthen or rental income weakens, financially stressed owners have fewer easy exit options. That can lead to more:
• Late mortgage payments
• Vacant and abandoned properties
• Failed rental investments
• Short-sale inquiries
• Deed-in-lieu considerations
• Foreclosure referrals
• REO assignments
• Investor disposition opportunities
WHAT THIS MEANS FOR KW DEFAULT SOLUTIONS AGENTS
This is the time to build relationships and strengthen your default-market knowledge—not after foreclosure activity has already increased.
Agents should be monitoring:
• Notice of default and foreclosure filings
• Properties owned free and clear or with substantial equity
• Vacant and absentee-owned homes
• Expired and canceled listings
• Distressed landlords in soft rental markets
• Builder standing inventory
• Properties requiring repairs or alternative marketing
• Homeowners who may need an equity sale or short sale
• Investors carrying underperforming rental properties
The opportunity is not simply finding distressed properties. It is helping homeowners, servicers and investors identify the right solution early enough to preserve equity and avoid unnecessary losses.
A homeowner experiencing mortgage difficulty may still qualify for a traditional equity sale. Others may require a short sale, loan workout, deed-in-lieu or another loss-mitigation solution.
Every situation should be reviewed individually.
KW Default Solutions is building a nationwide network of trained Keller Williams Realty professionals who understand default, loss mitigation, short sales, REO, property valuation and distressed-property disposition.
The market is changing differently in every state—and even in every metropolitan area. Agents who understand their local numbers will be better prepared to help homeowners and serve institutional clients.
Source: HUD Office of Policy Development and Research, Region 9: Pacific, First Quarter 2026
https://www.huduser.gov/portal/periodicals/USHMC/reg/Pacific-rr-1Q2026.pdf
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