Home prices are going up across the country — in aggregate. Looking at individual markets, however, some are showing prices have fallen from a year ago.
Single-family median home prices increased 4% in the fourth quarter from a year ago to $378,700. Prices were strongest in the Northeast in the last quarter, up 5.3%; followed by the South, up 4.9%; the Midwest, up 4% and the West, up 2.6%, according to the National Association of Realtors.
But drill down to the market level and it’s clear that prices in some areas are declining from the prior year. The positive regional numbers mask that about 11% of individual housing markets tracked by NAR — 20 of 186 cities — experienced home price declines in the fourth quarter of last year.
“A few markets may see double-digit price drops, especially some of the more expensive parts of the country, which have also seen weaker employment and higher instances of residents moving to other areas,” said Lawrence Yun, NAR’s chief economist.
Nearly all of the most expensive places to buy are in the West and half of the 10 most expensive cities are in California. Several of those places are seeing prices fall the most.
San Jose, California, was the most expensive place to purchase a home in the United States in the fourth quarter. But that median price of $1,577,500 is actually down 5.8% from a year ago — and prices there have already dropped 17% from the peak $1,900,000 median price in the second quarter of last year, according to NAR.
San Francisco had the biggest price drop in the country, year over year, last quarter, with the median price of $1,230,000 — down 6.1% from a year ago. Prices for San Francisco homes are already down 21% in the fourth quarter from the peak median price of $1,550,000 in the second quarter.
Among the most expensive cities that saw prices falling are Anaheim, California, with the median price of $1,132,000, down 1.6% from a year ago; Los Angeles, with the median price of $829,100, down 1.3%; and Boulder, Colorado, with the median price of $759,500, down 2.0%.
Other places with falling prices saw the big price increases during the frenzied home buying market of the past few years. They also tend to be appealing lifestyle destinations where people moved to as remote work provided more flexibility. These include Boise, Idaho, where prices fell 3.4% from a year ago and Austin, Texas, where prices are down 1.3%.
The good news for buyers looking for price relief is that the 4% median price hike in the fourth quarter is less than the 8.6% increase in the third quarter. In addition, the price increases are smaller, with far fewer markets experiencing double-digit price gains in the fourth quarter.
“A slowdown in home prices is underway and welcomed, particularly as the typical home price has risen 42% in the past three years,” said Yun, noting these cost increases have far surpassed wage increases and consumer price inflation since 2019.
Source: edition.cnn.com
