U.S. homebuyers looking to make a purchase this summer may have better luck finding lower list prices compared to last year.
Across the country, home list prices are falling for the first time in a few years, according to a report from Realtor.com. In fact, pandemic boomtowns where prices have surged starting in 2020 posted some of the biggest year-to-year price declines in May.
Coming after years of strong price growth, and with mortgage rates now hovering around 6.7% — compared to 5.8% in June of last year — sellers are finally being forced to list their homes for less. Real estate brokerage Redfin says median home prices in May were down 3.1% from 2022.
In its new report, Realtor.com figured out where prices are falling the most by calculating the median price per square foot in the 100 largest U.S. cities in May 2023 and compared it with May 2022.
- Home list prices, which have surged year over year since the pandemic homebuying frenzy, actually went negative last month. Realtor.com says sellers are listing homes for less because buyers can’t afford current mortgage rates.
- Western and Southern cities where prices skyrocketed during the pandemic (like Austin, Texas) saw the biggest year-to-year drops in home prices per square foot. This is partially because new construction in these cities has helped alleviate housing shortages spurred by pandemic-driven migration, according to Realtor.com.
- Realtor.com predicts that list prices will continue falling, although economists don’t expect massive declines. A separate report from the real estate site says that prices fell .9% for the week ending June 10, and year-over-year prices will likely go negative again. Realtor.com predicts prices will mostly flatten out in the next year and see single-digit drops.
10 cities where home list prices are falling the most
These are the greater metropolitan areas, including towns and suburbs surrounding the main cities, where median home prices posted the biggest year-to-year declines in May.
- Boise, Idaho
Median listing price: $609,875
Year-over-year price per square foot change: -7.8%
- Austin, Texas
Median listing price $583,751
Year-over-year price per square foot change: -7.7%
- Myrtle Beach, South Carolina
Median listing price: $366,075
Year-over-year price per square foot change:-7.3%
- Phoenix, Arizona
Median listing price: $529,450
Year-over-year price per square foot change: -5.6%
- Sarasota, Florida
Median listing price: $549,900
Year-over-year price per square foot change: -4.7%
- Salt Lake City, Utah
Median listing price: $635,000
Year-over-year price per square foot change: -4.0%
- Pittsburgh, Pennsylvania
Median listing price: $238,250
Year-over-year price per square foot change: -3.9%
- Winston-Salem, North Carolina
Median listing price: $345,899
Year-over-year price per square foot change:-3.6%
- Sacramento, California
Median listing price: $662,875
Year-over-year price per square foot change: -3.4%
- Chicago, Illinois
Median listing price: $376,000
Year-over-year price per square foot change: -1.1%
Keep in mind
Realtor.com says there are many cities throughout the U.S. where prices are still going up — mostly in more affordable markets in the Midwest that weren’t as impacted by pandemic price surges as places like Austin or Boise, Idaho. What’s more, cities that were hit hardest by the pandemic homebuying frenzy are posting some of the biggest declines now because their prices climbed so high over the past few years.
Data from the Federal Reserve Bank of St. Louis shows that as of the first quarter of 2023, the median U.S. home list price was $436,800, down from $479,500 in the fourth quarter of 2022. While Austin may have seen a 7.7% year-over-year drop in price per square foot, its median listing price of $583,751 is still much higher than the national figure.
This article originally appeared here and was republished with permission.