Patrick Smith Homebuyers are so fed up with San Francisco's crazy housing market that prices are now falling.

According to real-estate brokerage Redfin, house prices fell 1.8% year-on-year in March, the first such drop in four years.

San Francisco is one of the most expensive housing markets in America. Data from the Federal Housing Finance Agency showed that prices rose 20.7% in the area in the fourth quarter, the highest among the most populated metro areas in the US.

Redfin Chief Economist Nela Richardson said in a release that the share of Redfin agents' offers that faced bidding wars fell to 77% from 94% last year.

"This suggests that the price drop is not about inventory, it’s about buyers fed up with high Bay Area prices and crazy competition," she said.

An undersupply of housing coupled with healthy demand is helping to keep house prices elevated, especially in cities with the best career prospects, like San Francisco.

Redfin said that unless new listings see a significant boost, sales may halt or decline in many markets as we head into the busy spring season.

Paragon Real Estate group recently said that the median condo price in San Francisco fell in the fourth quarter compared to Q1, the first such drop in four years.

Richardson added, "In 2015 sales grew 7 percent nationally but there simply aren’t enough homes for sale to maintain such a torrid pace again this year. No matter how high homebuyer demand is, it takes two to tango, and many sellers are sitting this year out."