Amidst the ups and downs, the US real estate market is starting to see declines in property values.
The real estate market in the United States cares for everything. While existing home sales fell for the 12th straight month in January due to high prices, record inflation and high interest rates, there are places where home values have fallen.
Existing home sales fell 0.7% in January from the previous month, according to data released Tuesday by the National Association of Realtors (NAR). Compared to the same period last year, these sales decreased by 36.9%.
But while house prices are rising across the country as a whole, some individual markets are down from a year ago. The positive regional numbers obscure the fact that 20 of the 186 cities monitored by the NAR – the equivalent of 11% of that pie’s total – experienced declines in Q4 2022 and January and February 2023. house prices.
“In some markets, prices could drop by double digits, especially in some of the more expensive parts of the country, which have also seen weaker employment and more cases of residents moving to other areas,” said Lawrence Yun, the head of of the NAR.
Several of the most expensive places are the ones that lower prices the most. Almost all of them are in the West and half of the 10 most expensive cities are in California.
San Jose, California was the most expensive place to buy a home in the United States in the fourth quarter. But that median price of $1,577,500 is actually 5.8% lower than a year earlier, and prices are already 17% lower than the peak median price of $1,900,000 in the second quarter of last year, according to NAR.
San Francisco had the country’s largest price drop in the United States: the last quarter was down 6.1% compared to the previous year and today the average price is US$1,230,000. Home prices in San Francisco are already down 21% in the fourth quarter from the median peak price of $1,550,000 in the second quarter.
Among the most expensive cities to see prices fall are Anaheim, Los Angeles and Boulder, Colorado, with an estimated drop of between 1.2% and 2%.
Also in Boise, Idaho, where prices fell by 3.4% from a year earlier, and in Austin, Texas, by 1.3%.
“There is a slowdown in house prices and that is welcome, especially as the typical house price has risen 42% over the last three years,” Yun said, pointing out that these cost increases far outweigh the rise in wages and inflation. consumer prices since 2019.
House prices in the United States rose sharply during the pandemic. In many cities they even shot up too much. But with mortgage rates near record lows, buyers took over the market.
Last year, however, the picture changed as mortgage rates skyrocketed as a result of the Federal Reserve’s historic campaign to contain inflation. After that, purchases fell sharply. According to NAR, by the end of 2022, existing home sales had fallen nearly 18% from 2021 as potential buyers left the market.
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