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Bay Area homes are getting slightly more affordable thanks to falling prices and lower mortgage rates. The median price paid for all new and existing homes and condos in the nine-county region fell to $815,000 in July, down 4.7% from June and down 4.1% from last July, according to a report released Thursday by CoreLogic.

July was the third consecutive month prices fell on a year-over-year basis, starting with a 1.9% decline in May and a 2.2% dip in June, CoreLogic said in a release.

Last month’s drop was the biggest since December 2011, when the median price fell 10.5% year over year. “Before this March, the median sale price had risen on a year-over-year basis for 83 consecutive months,” it said. The highest recorded median was $875,000 in June.

The only Bay Area counties where the median price rose year over year were the most and least expensive. In San Francisco, the median gained 3.8% to $1.35 million, and in Solano it was up 4.3% to $450,000. The median is the point at which half of homes sold for more and half sold for less.

Prices for resale condominiums took the biggest price hit in July, falling 10.9% year over year to $668,500. Prices for existing single family homes fell only 1.2% while new-home prices fell 3%, according to CoreLogic data.

Recession fears have sent bond yields lower, and that’s pushing down mortgage rates, too. The average rate on a 30-year fixed-rate mortgage was 3.6% this week, up slightly from 3.55% last week but down almost a full percentage point since this time last year, Freddie Mac reported Thursday.

“Lower mortgage rates and the slowing, if not elimination, of price growth in many areas makes a meaningful difference for some buyers,” CoreLogic analyst Andrew LePage said in a news release.

Anecdotally, real estate agents and buyers say the market remains mixed.

“Some areas are very hot with multiple offers; another house can sit a block away and not get any offers,” said Nicole Aissa, a broker with Keller Williams Peninsula Estates.

Although many homes are still selling for more than the asking price, in some cases they’re getting less than what Realtors and sellers expected.

“The trend is to list homes under market value so when it gets bid up it looks like it went way over asking,” said Gillian Leslie, an agent with Red Oak Realty in the East Bay.

She had clients interested in a home listed at $1.8 million. It sold for $2.175 million, but “the expectation was that it would go for $2.3 or $2.4 million,” Leslie said.

Tiffany Schrader-Brown and her husband bought a two-bedroom, one-bath home in Berkeley about seven years ago. Three years ago, they rented it out and moved to Philadelphia, where her husband did his medical residency. When they came back this year, they wanted a bigger home for their family, which includes three kids ages 11, 6 and 3.

They wanted a fixer-upper, since they are more affordable and she designs homes for a living, but “it seems like every one of them a developer has purchased. A lot have already been purchased and flipped,” Schrader-Brown said.

It’s easier to find duplexes and triplexes that could be turned into a single-family home, but that’s an arduous, time-consuming process and “I don’t want to take away from the housing stock,” she added.

There are some single-family fixer-uppers, she said, but they might be in a slide zone and still cost $1,000 per square foot. Or they have no utilities so they can’t get a bank loan.

But Schrader-Brown is optimistic.

“The market is changing now — I think it’s going to be more hospitable for me in the coming months, I hope. It seems that the smaller homes for people with one or two children seem to stay at a higher price point; the ones that are a little bigger seem to be declining.”

In San Francisco, the condo market “has been pretty stable for the entire year,” said Garrett Frakes, a managing director with brokerage firm Polaris Pacific. Condo prices for the three months ending July are basically flat with the same period last year. “Buyers can potentially get some discounts so instead of paying over list price, maybe they are paying slightly under list price.”

Inventory is creeping up, but still low. In San Francisco it would take just 1.6 months to sell all condos on the market at the current pace of sales. In Santa Clara and San Mateo counties, it would take about four months. “That’s still low from a supply standpoint but a heck of a lot better than two months.”

On the sales front, the number of Bay Area homes and condos that closed in July was 7,404, up 0.5% from June but down 2.2% from the same month last year. That was the lowest number of sales for the month of July since 2011, CoreLogic said. Sales have fallen on a year-over-year basis for 12 consecutive months.

On the bright side, the 2.2% decline in July was the smallest year-over-year decrease for any month since July 2018. Sales typically slow between June and July; since 1988, the average change between those two months is a 5.9% drop, CoreLogic said.

Kathleen Pender is a San Francisco Chronicle columnist. Email: kpender@sfchronicle.com Twitter: @kathpender

This may be hard to believe considering how far home prices have risen, but there are properties in every California county — including almost 50,000 in the Bay Area — that are still benefiting from temporary property tax reductions they got during the housing bust.

That’s because the market value of these properties, which are mostly residential, is still below their “Proposition 13 value.” This is where they would be assessed today under Prop. 13, had they not gotten the temporary reduction.

These properties make up a small percentage of the tax base in most Bay Area counties except Contra Costa, where they number 20,920, or 18% of all parcels. San Francisco has the smallest number — 617, or 0.3% of all parcels. Of those, 369 are condo units in the Millennium Tower, where values have sunk along with the building.

Statewide, they make up about 8% of all secured parcels, according to a survey by the California Assessors’ Association. In the Bay Area, they account for just under 2%.

In most counties, they tend to be homes purchased around 2005 to 2007 in areas that were undergoing rapid development and were slower to recover from the housing bust. Think of places like Brentwood and Antioch in Contra Costa and American Canyon in Napa County.

Under Prop. 13, properties in California are generally reassessed for property tax purposes only when they are sold. Assessed value is the amount subject to property tax.

In between sales, the assessed value can’t go up by more than an inflation factor capped at 2% a year, plus the value of additions and major improvements. This adjusted value is called the “factored base year value,” or Prop. 13 value for short.

Although Prop. 13 limited taxes on the upside, Proposition 8 allows for a temporary reduction in a property’s tax assessment when its market value drops below its Prop. 13 value. Properties with these reductions are said to be in “Prop. 8” or “decline in value” status. Reasons for a reduction could include damage by fire or flood, or a downturn in the overall market.

Once a home has gotten this reduction, the county assessor must reassess it at market value as of Jan. 1 each year — which can result in a further decrease or an increase greater than 2% a year — until it reaches its Prop. 13 value, or where it would have been without the temporary reduction. At that point, “all the protections of Proposition 13 kick in,” said Santa Clara County Assessor Larry Stone. It becomes subject to the 2% annual limit and reassessed only when sold.

Normally, owners must apply for a reduction, but after home prices started falling after 2007, many county assessors applied them automatically to wide swaths of homes purchased near the peak. Most homes didn’t get them because their market values remained above their Prop. 13 values.

Statewide, the number of properties with these reductions soared from about 335,000 in fiscal year 2007 to a peak of nearly 3.6 million in 2012, then dropped to about 1 million in 2018, according to the California Board of Equalization data. It doesn’t have data for this year, but, according to the association’s survey, it’s about 975,000.

In the Bay Area, the median price for homes and condos surpassed its mid-2007 peak of $665,000 in April 2016, then went on to post many new highs, topping out at $875,000 in June 2018, according to CoreLogic. In June, it was $856,000.

Despite this strong rebound, some homes are still in Prop. 8 status because of the inflation factor.

Suppose someone bought a home for $1 million near the peak in 2007 and later got its assessment reduced. Today, its Prop. 13 value would be about 20% higher, or $1.2 million, because of the inflation factor, said Brian Hitomi, Alameda County’s chief deputy assessor.

If the home was worth $1.1 million on Jan. 1 of this year, it would be assessed for $1.1 million, but it would still be in Prop. 8 status — and subject to annual reassessment — because it hasn’t reached its Prop. 13 value.

Alameda County still has about 5,000 properties with a temporary reduction, down from about 108,000 in 2011-12. Some of the 5,000 “have condition problems, but the vast majority were purchased at the peak,” Hitomi said. During the downturn, these reductions took a bite out of property taxes, but today the impact is negligible because they are close to being fully restored.

Solano County still has about 8,900 properties with a temporary tax reduction, or 6% of its total. Some homes that sold for more than $1 million at the peak “now are probably in the $700s. They have quite a ways to catch up,” Assessor Marc Tonnesen said.

Those properties are costing the county money, but at least it has the opportunity to recapture revenue as their market values go up. During the downturn, a lot of people walked away from their homes. When those buildings changed hands, they were reassessed at depressed levels. The county had no opportunity to recapture that value until they were resold at higher prices.

San Mateo County has 1,017 properties with temporary reductions, or 0.5% of all properties. Of those, 245 are residential, 37 are commercial and the rest are mainly mobile homes, apartment buildings and vacant or agricultural land.

In Santa Clara County, 1,843 properties, 0.4% of the total, still have reductions. That’s down from 136,559 properties, or nearly 25%, in 2012-13, Stone said. About 1,400 of the remaining properties are residential, and of those, 43% are in Gilroy and Morgan Hill, which combined have less than 4% of all parcels in the county.

In Sonoma County, 6,641 properties, or 3.6% of the total, still have temporary reductions. Only 982 of those were damaged or destroyed by the 2017 wildfires that consumed more than 5,000 homes in the county. That number is not higher because many fire properties were sold and reassessed, or they were purchased so long ago that their Prop. 13 value is still below market value, said Chief Deputy Assessor Greg Walsh.

In Napa County, 2,242, or 4.3%, of all properties have a reduction. “We aren’t putting many if any (new ones) on Prop. 8, but they are slowly dropping away. Now that the market may be stagnating, they may stay around for a few years,” Assessor John Tuteur said. “In the 1980s, we put a bunch of condominiums on Prop. 8. They stayed on Prop. 8 for 15 years until the market finally caught up.”

In Contra Costa, most of the properties with reductions “are in a select part of Richmond, Oakley and Brentwood, a little in Antioch and Pittsburg,” Assessor Gus Kramer said.

Modoc County, in the northeastern corner of the state, has 54% of its properties with a decline-in-value status, the highest percentage in the state.

About 95% of those properties, however, are in one subdivision called California Pines. “It was built in the 1960s or 70s, but the developer died in a tragic ski accident and all development stopped,” said Modoc County Assessor Kristen DePaul. Over the next several decades, various companies began aggressively marketing the lots, mostly to out-of-town buyers for retirement or vacation homes. The last to do so was National Recreation Properties Inc. of Irvine, which used former “CHiPs” star Erik Estrada as its spokesman.

“They were a hot commodity for years and really inflated the market for this piece of land out in the middle of absolute nowhere,” DePaul said. After NRPI went bankrupt in 2012, “there was just no market” and prices “dropped drastically,” she added. “I really don’t know if the subdivision will ever rebound without another marketing agency behind it.”

Other counties with a significant percentage of properties with temporary reductions include Alpine (30.3%), Butte (18.4%), Calaveras (19.7%), Kern (17.2%), Mono (21.8%), Plumas (24.2%) and Riverside (18.8%).

Kathleen Pender is a San Francisco Chronicle columnist. Email: kpender@sfchronicle.com Twitter: @kathpender