The median price paid for a Bay Area home or condo last month was $860,000, up 1.2% from April but down 1.7% from May of last year, representing the biggest year-over-year percentage drop in more than seven years, according to a CoreLogic report released Thursday.

To put that year-over-year decline in perspective, it’s important to remember that in May of last year, the market was in a frenzy and the median price was one month away from its all-time high of $875,000, set in June.

After home sales rose at double-digit rates in the first half of last year, growth began slowing in the second half, to almost a crawl this year. In March, the median price actually dipped 0.1%, its first year-over-year decline in seven years, and in April it was unchanged from the previous year.

Last month’s 1.7% drop “marked the largest decline since February 2012, when the median fell 3.6% year over year,” said CoreLogic analyst Andrew LePage. The next month, the median rose 0.6%, and in April 2012, it began an 83-month stretch of consecutive gains. CoreLogic’s report includes new and existing homes and condos in the nine-county Bay Area.

Today, “there is a sense of pause by buyers because they don’t know what’s next,” said Selma Hepp, chief economist with the Compass real estate brokerage. “We are definitely seeing a lot of activity out there; buyers are coming to open houses. But for homes in imperfect condition, or imperfectly priced, they’re not willing to pull the trigger.”

Well-priced homes in excellent condition are still selling briskly, she added. The median time on the market for homes that sold last month was 14 days, only two more than a year ago. But for homes that were still for sale last month, the median time on market was 22 days, six days longer than last year, she said.

Plotted on a graph, prices today look like a “tabletop,” compared with the “mountaintop” seen in the last cycle when prices plummeted after a steep run-up, she said.

In San Francisco, the market varies by price range and neighborhood, but overall, “it’s relatively flat, which is not so bad, considering that the housing market has been nuts in the past few years,” said Dona Crowder, a broker with Coldwell Banker.

“Luxury” homes in the $7 million to $30 million price range are selling well, she said. And for homes priced from $500,000 to $1.5 million, “you’re still going to experience multiple offers in a preponderance of the situations.” The slowest segment is $3 million to $5 million homes.

Prices rose 1.2% from April to May thanks to “lower mortgage rates, more inventory and a transition to a more neutral market where buyers have some bargaining power,” LePage said in a news release.

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The average rate on a 30-year, fixed-rate loan dropped to 3.73% this week from 4.5% the first week of January, according to Freddie Mac.

That drop “created a window of opportunity for a lot of first-time buyers,” said Phil Kerr, CEO of multifamily developer City View. He’s seen a “big surge in sales since January” at the Ice House, a townhome development under construction in West Oakland that was severely damaged in an October fire.

The blaze set the project back by about six months, but half of its 126 units have already been sold. About a dozen are on the market at prices ranging from the mid-$600,000s to the high $800,000s for two- and three-bedroom units, respectively. The rest of the units are not ready for sale.

The fire inspired Kerr to offer a $2,500 discount to buyers in “hero professions” at all of City View’s 22 projects going up around the state. For the discount, heroes include firefighters, teachers, nurses, police officers and veterans.

Kerr said Ice House is the fastest-selling of those projects, which also include the Station House townhomes nearby.

Danielle Milburn and her fiance, Marcus Edwards, had been looking at homes in the Bay Area for several years, waiting to save enough money and for prices to drop. But “the longer we take to save and prepare and wait, we’re kind of in the same boat because things keep going up,” Milburn said. “The more money we save, everything is going up that much more too.”

They finally decided to put a deposit down on a two-bedroom, 2½-bath unit at Ice House for $675,000. “We’re taking a leap of faith, ultimately,” Milburn said. Their mortgage payment will be about the same or a little less than they their combined rent on their places Oakland and San Francisco.

Milburn, who works in mental health, is familiar with the neighborhood; she used to work at the Boys and Girls Club around the corner.

There’s no sign yet that the large number of initial public offerings by Bay Area companies is pushing up prices, although they could be preventing a larger drop. Since January, 22 Bay Area firms have gone public; San Francisco e-commerce site the RealReal premieres Friday. But almost all of these companies, with the notable exception of Slack, prevent employees and other insiders from selling their stock for a period of time, usually six months.

The number of Bay Area homes sold last month was 8,310, up 18.9% from last month but down 2.7% year over year. Last month’s sales were the lowest for the month of May since 2016.

Since 1988, the average change in Bay Area home sales from April to May is a gain of 7.8%.

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