SEVERAL cities across the country in rural and metropolitan areas are seeing housing prices decline.
The National Association of Realtors (NAR) latest quarterly report found that one in 10 housing markets saw home price decline in the fourth quarter of 2022, compared to a year before.
Several of these markets are located in more expensive parts of the United States, such as southern California.
This is mainly because those areas have seen “weaker employment and higher instances of residents moving to other areas,” Lawrence Yun, chief economist for NAR, said.
“A slowdown in home prices is underway and welcomed, particularly as the typical home price has risen 42 percent in the past three years,” Yun added.
Yun also explained that far fewer metro markets have experienced double-digit price gains in the latest quarter.
DECLINING PRICES
Below is a complete list of the cities across the country that saw a decline in housing prices from the fourth quarter of 2022 year-over-year from the largest drop to the smallest:
- San Francisco, California
- San Jose, California
- Cumberland, Maryland
- Boise, Idaho
- Canton, Ohio
- Sherman-Denison, Texas
- Sacramento, California
- Memphis, Tennessee
- Topeka, Kansas
- Charleston, West Virginia
- Boulder, Colorado
- Detroit, Michigan
- Anaheim, California
- Austin, Texas
- Los Angeles, California
- Bismark, North Dakota
- Kankakee, Illinos
- Youngstown, Ohio
- Reno, Nevada
- Jackson, Mississippi
Among the 20 cities, San Francisco saw a 6.1 percent decline in median prices from the year before – leaving single-family home buyers with prices around $1,230,000.
San Jose, California and Cumberland, Maryland closely followed with a decline of 5.8 percent and 4.1 percent in median prices.
Most read in Money
The smallest decline seen from the fourth quarter of 2021 to the fourth quarter of 2022 was in Jackson, Mississippi – which only recorded a 0.1 percent drop in prices.
This left buyers with a median price of $227,500.
While the decline in prices is good news for those looking to buy their first homes, it remains unclear if it will continue into 2023.
“Even with a projected reduction in home sales this year, prices are expected to remain stable in the vast majority of the markets due to extremely limited supply,” Yun said.
“Moreover, there are signs that buyers are returning as mortgage rates decline, even with inventory levels near historic lows.”
The National Association of Realtors did not immediately respond to The U.S. Sun for comment.
The existing-home sales for January 2023 is expected to be released on Tuesday.
Amid the price declines, the NAR did also find that nine out of 10 markets saw increased home prices.
Additionally, 18 percent of the 186 tracked areas reported price increases in the double-digits.
ANTICIPATED PRICE DROPS
Strategists with Goldman Sachs have previously estimated that four cities across the country could see severe price drops in the housing market.
Specifically, the bank has suggested that Austin, Phoenix, San Diego and San Jose could all see a decline of more than 25 percent in home prices.
By the fourth quarter of 2023, the strategists say housing prices across the country could drop by 6.1 percent year-over-year.
Experts say the anticipated decline is driven by interest rates for mortgages being raised as well as low inventory.
Combined, it appears to have led many prospective buyers to hold off until prices drop.
ADVICE FOR FIRST-TIME BUYERS
What to do when buying a home can vary depending on your financial situation and where you are looking to live.
However, financial planner Matthew Frankel revealed two key things for each first-time home buyer to consider, especially when getting a mortgage:
- Shop around
- Have a short list of mortgage lenders that meet your needs
If you are looking to buy with a downpayment, be sure to check if you qualify for any relief programs in your area.
Last year, Bank of America launched a relief program to allow eligible individuals and families to get an affordable loan to purchase a home that required no mortgage insurance or minimum credit score.
The U.S. Sun revealed which cities you can expect to see a dip in home prices.