High interest rates and rising prices can only last for a while before potential buyers give up and give up on renting, or simply stay on the spot.
Now, many American cities are transforming. Once a hot market, stock is limited frenzied Bidding wars have driven prices down as sellers try to lure buyers back to the market.
This is where house prices are falling the fastest
Not surprisingly, some of the other cities on the list are also the ones where home prices have fallen the fastest recently. According to real estate agent website data, Miami Topping the list of cities with the fastest depreciating home prices, it has been at the top of the list of cities with the fastest appreciating home prices for four years. This year, the median home price plummeted 11.2% from last year to $439,000.
The other 10 cities on the list include (in year-over-year percentage change and current median home price):
City | Year-on-year percentage change | Current median house price |
---|---|---|
Miami, Florida | -11.2% | $439,000 |
Denver, Colorado | -6.3% | $639,000 |
Seattle, Washington | -5.5% | $777,000 |
Kansas City, Missouri | -4.9% | $440,000 |
Oklahoma City, Oklahoma | -4.3% | $339,000 |
San Jose, California | -4% | $1,469,000 |
Tampa, Florida | -3.2% | $425,000 |
Austin, Texas | -3.1% | $565,000 |
Detroit, MI | -3% | $260,000 |
San Antonio, Texas | -2.6% | $348,000 |
Raleigh, North Carolina | -2.6% | $462,000 |
To put the numbers into context, Zillow Revealed Earlier this year, the average household would need to earn $47,000 more to afford a home this year not just one four years ago.
Active listings surged 37%, prices cooled
these four weeks ends in On June 23, the typical home in the United States sold for less than its asking price. This is an epic statistic redfin tunaConsider the persistent narrative since the pandemic that low inventory and high interest rates are causing prices to rise.
Nearly 7% of home sellers have lowered their asking prices, the highest number since November 2022, according to Redfin data. real estate agent network The data shows similar numbers. At the same time, massive new inventory builds in Sunbelt states and the Midwest have tipped the supply-demand balance.
Here are some key points:
- Pending home sales fell 4.3% from the same period last year maximum down for four months. (Redfin Tuna)
- 60% of households It is listed as No contract signed for at least a month. (Redfin Tuna)
- The total number of unsold homes, including homes under contract, increased 22.4% from last year. (real estate agent website)
- The number of listings increased by 37% compared with the same period last year, increasing for eight consecutive months. (Real Estate Agent Website).
- Inventory in the $200,000 to $350,000 price range outpaced all other price ranges, growing 50% compared to last year. (real estate agent website)
- Smaller, more affordable homes in the South are driving inventory growth. (real estate agent website)
Why are prices falling?
no doubt interest rate have a lot of Something to do with it. In addition to rising home prices, a double whammy of unaffordability is pushing many would-be buyers to their limits.
This doesn’t mean we’re about to have a housing crash, as many homes in different parts of the country yes still Sell Asked above. However, with Home prices are currently 47% higher than in 2020the upward push can only last for a while before buyers pull out and sellers receive a reality check.
According to various reports, it is emphasized that CNBCThe overall trend is for the market to cool, with inventories slowly normalizing but still down 32.4% compared to typical levels from 2017 to 2019.
Salary growth is not fast enough
Although wages have tended to image dilation Since 2020, the same cannot It is said The relationship between wages and house prices. Generally speaking, since the 1960s, House prices are rising 2.4 times faster than the inflation rate. To buy an affordable home in 2024 (comparable to what it cost in the mid-1980s), a household income would need to be at least $134,000. The median household income in the United States is only $74,580.
Home prices have tripled or quadrupled in many metro areas since 2000, and in some areas have nearly doubled since 2020.dominant.
What this means for investors
The places where home prices are falling the fastest don’t correlate with where potential landlords can look for cash flow, except for possible Detroit There’s some left of Midwestern cities. However, for investors looking to invest house hacking or those who can afford to purchase a personal residence Already built Stocks, catching a city that is correcting is always a prudent move.
Every city in America is markedly different, with home prices often fluctuating from one street to the next. “Some buyers think they can get a deal because they’ve heard the market is cold, while some sellers think every home will sell for top dollar regardless of condition,” Los Angeles-based Redfin agent Marije Kruythoff said in a press release. “Really, it all depends on the house and the location.”
The ultimate buyer’s market never been hot
While everywhere else has seen explosive growth during the pandemic, New York City has been one of the biggest losers and one of the few major markets to lose real value in 2020.
Today, if you have the means to make money, there are opportunities in this city. In Manhattan, apartment prices fell 3% as inventory increased, with the average price “just” $2 million. It may seem absurd to invest, but according to CNBC, with an inventory backlog of 9.8 months. Any period longer than six months constitutes a buyer’s market.
Interestingly, 62% of transactions in Manhattan were all-cash purchases, suggesting that high interest rates have less of an impact here. they are elsewhere. Rents haven’t increased in six months, with average rent holding steady at $5,000 a month.
While Manhattan may be out of reach for many investors, for those who can afford it, it is one of the most lucrative markets in the United States due to its limited size (Manhattan is an island after all). For example, a recent article Bloomberg According to reports, New York City’s rental vacancy rate one more 1.4%. The bottom line is that Manhattan real estate can increase in value significantly over time, so a temporary downturn is a golden opportunity to buy—though don’t count on any cash flow If you are raising money. this is a market where you can deposit cash and watch fair Increase.
final thoughts
Although some cities that had previously experienced price increases have seen housing price declines, the United States is a country of extremes, and this is even more true in the real estate sector. According to recent SmartAsset analysis, Can still live exist many cities in the united states The median annual salary for full-time workers is approximately $60,000. It’s still okay cash flow in many cities didn’t make one huge Home down payments are typically less than $240,000.
in short, No Consider falling house prices a sure sign to invest in this market. Instead, calculate how much down payment you can afford and what type of community you want will be,as well as return on investment This will work for you. Inventory increase makes search Easier Better than before.
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