Modesto, CA Real Estate Market 2026: A Score of 97 While Home Values Soften

The Modesto real estate market scores 97 out of 100 on the PropertyIQ Score as of February 28, 2026. The median price in the Modesto metro is $455,000 as of February 28, 2026.

Those two data points carry an apparent contradiction. Home values in Modesto are down 2.8% year-over-year as of February 2026. And yet the market scores 97, placing it in the top tier nationally. Home sales are up 21.4% year-over-year. The pending ratio stands at 0.58.

Understanding why Modesto scores this high requires separating what the PropertyIQ Score measures from what a price decline implies.

What a Score of 97 Actually Means

The PropertyIQ Score synthesizes supply, demand, economic, and valuation data into a single 0-to-100 monthly score. A score of 50 represents the California state average. Modesto at 97 is well above that average and near the top of the national scale.

Critically, the score reflects the current supply-demand balance, not the direction of price change. A market can have declining prices and a high score simultaneously when inventory is tight and buyer demand is strong. That is exactly the dynamic in Modesto: there are 661 homes for sale, new listings are down 7.4% year-over-year, and buyers are competing for what is available.

The price decline may itself be causing the demand surge. As Modesto prices soften from 2024 peaks, buyers who were priced out are re-entering. The result is more transactions, a high pending ratio, and a score that reflects the competitive environment rather than the price trajectory.

Modesto's 12-Month Score History

Modesto's score completed a full cycle over the past 12 months:

• February 2025: 97
• March 2025: 93
• April 2025: 89
• May 2025: 89
• June 2025: 88
• July 2025: 86
• August 2025: 88
• September 2025: 83
• October 2025: 84
• November 2025: 89
• December 2025: 91
• January 2026: 94
• February 2026: 97

The market peaked at 97 in February 2025, declined through summer 2025 to a low of 83 in September, and recovered fully to 97 by February 2026. The summer 2025 softening corresponds to the period when inventory was rising and buyer activity slowed. The recovery through late 2025 and early 2026 reflects renewed buyer engagement as prices adjusted.

Modesto Home Prices and Market Activity

As of February 2026:

• Median listing price: $502,475 (Realtor.com)
• Zillow home value estimate: $461,273 (January 2026)
• Home value appreciation YoY: down 2.80%
• Home value appreciation MoM: down 0.29%
• For-sale inventory: 661 active listings
• Inventory YoY: up 6.18%
• Days on market: 44 days
• New listings: 374 (YoY: down 7.43%)
• Pending listings: 383
• Pending ratio: 0.58
• Price cut rate: 15.81% of listings
• Price per square foot: $299
• Home sales YoY: up 21.39%
• Sale-to-list ratio: 99.78% (November 2025)

The pending ratio of 0.58 is the key number. With 661 active listings and 383 pending, 58% of what is on the market already has a buyer attached. That is strong demand absorption even as prices are modestly declining.

Home sales are up 21.4% year-over-year. Volume is rising while prices are softening. This is the textbook pattern of a market finding its clearing price after a period of overvaluation: buyers come back when affordability improves, transaction volume increases, and the market re-establishes equilibrium.

The 15.81% price cut rate reflects sellers still adjusting expectations. Nearly one in six listings has been reduced, which indicates the listing price discovery process is not yet complete. But the high pending ratio and sale-to-list ratio of 99.78% show that correctly-priced homes are selling at or near ask.

Modesto Economic and Demographic Profile

Modesto is the seat of Stanislaus County and the commercial center of California's Central Valley. The metro economy is anchored by agriculture, food processing, warehousing and logistics, and healthcare.

As of 2023 Census data:

• Metro population: 552,250
• Median household income: $79,661
• Median age: 34.8
• Homeownership rate: 61%
• Unemployment rate: 6.7% (November 2025)

Unemployment at 6.7% is elevated compared to coastal California metros. The Central Valley economy is cyclical and tied to agricultural seasons, distribution activity, and a manufacturing base that faces ongoing structural headwinds. The 6.7% rate is not alarming by Central Valley standards but reflects a market that does not have the income growth runway of the Bay Area.

Median age of 34.8 is young, reflecting a family-formation demographic that drives housing demand at affordable price points. Modesto draws buyers who are priced out of the Bay Area, particularly from the south Bay, Sacramento, and East Bay, who can tolerate longer commutes or remote work arrangements.

The Affordability Picture

The income needed to buy at the median stands at $133,556 as of February 2026, calculated against the $502,475 median listing price. The metro median household income is $79,661. That is a significant gap: the income to buy is 68% above what a typical Modesto household earns.

The overvaluation metric is 64%, reflecting the stretch between Modesto prices and local income-based affordability. This overvaluation has been compressing as prices decline year-over-year, but it remains elevated.

The affordable home price based on the metro median income calculates to $299,707, roughly $200,000 below the current listing median. First-time buyers at the local median income face substantial affordability pressure, which is why Bay Area spillover buyers, who bring higher incomes, are a structural part of the Modesto demand equation.

The Zillow home price forecast as of December 2025 projects +0.9% appreciation over the next 12 months, a modest forward-looking signal. The forecast reflects the mixed picture: tight supply supports stability, but affordability constraints limit upside.

The Rental Market in Modesto

The Zillow rent index for Modesto stands at approximately $2,046/month as of December 2025. Against a Zillow home value of $461,273, that produces a gross annual yield of approximately 5.3%. That is a functional rental yield by California standards, where coastal markets typically produce well below 4%.

New construction sales came in at just 31 units in November 2025, a low figure for a metro of 552,000 people. Modesto's new construction pipeline is thin, which means inventory relief from builder activity is limited. This structural supply constraint helps explain why the score remains high even as prices soften.

Years to save for a down payment: 11.3 years based on current income and savings rates. That figure captures the financial reality for local buyers, many of whom rent out of necessity rather than preference.

What Buyers and Investors Should Know

For buyers: Modesto's current dynamic is worth examining. Prices are down 2.8% year-over-year, meaning the market is more accessible than it was in 2024. But the pending ratio of 0.58 shows that other buyers have the same idea. This is not a market where buyers have unlimited time to decide. Correctly-priced homes are going pending at a high rate despite the price softening.

The 44-day average time on market gives buyers more room than the tightest Northeastern markets, but competition for well-priced inventory is real.

For investors: The cash flow math at $461,000 Zillow value against $2,046/month rent is more viable than Bay Area alternatives. A 5.3% gross yield is workable before expenses. The 5-year appreciation of 16.87% reflects steady long-term value growth. The near-term price softening, down 2.8% YoY, represents a modest headwind.

The Central Valley's logistics and distribution sector supports long-term rental demand from workers in warehousing, agriculture, and manufacturing. Modesto is not a tech-spillover appreciation play in the same way as nearer Bay Area markets, but the rental fundamentals are more accessible.

The Bottom Line

The Modesto real estate market scores 97 out of 100 on the PropertyIQ Score as of February 28, 2026. Home values are down 2.8% year-over-year, but 58% of active listings are pending, home sales are up 21.4% annually, and new listings are declining. The score reflects what the data shows: tight inventory, strong buyer engagement, and a market that priced more buyers back in as values softened.

Modesto is not cheap by California standards. But within California, it is one of the more functional markets for buyers and investors seeking a high-scoring alternative to Bay Area prices.

View the full Modesto PropertyIQ Score and compare it to other California markets at propertyiq.app. Free to use, updated monthly.