These Cities Saw the Prices of Houses Fall the Most
KEY POINTS
- Redfin analyzed the 100 largest U.S. metropolitan housing markets from February 2022 to August 2022.
- Eight out of the top 10 cities where the housing market is cooling the fastest are on the West Coast.
- Despite the decrease in prices in some of these markets, it is still unaffordable for many home buyers.
These 10 cities are most likely to weather any recession.
The housing market has slowed down amid higher mortgage rates, inflation, and all-time high home prices. According to data from Redfin, home sales in July dropped 19.3% year over year. It's the lowest level of sales since mid-2020, during the first phase of the COVID-19 pandemic.
Redfin also analyzed and ranked the 100 largest U.S. metropolitan areas based on numerous metrics from February 2022 to August 2022. The metrics include the price of the homes, price drops, speed of home sales, and more.
The 10 markets cooling the fastest
The analysis compared metrics from August to February because that's when the housing market reached a peak in terms of demand and competition while the number of homes for sale was at its lowest. Based on the data, here are the ten cities where the housing market is cooling the fastest.
| Rank | City | % drop in price from Feb. to Aug. | Median sale price |
|---|---|---|---|
| 1 | Seattle, WA | -17.7% | $774,950 |
| 2 | Las Vegas, NV | -14.5% | $416,000 |
| 3 | San Jose, CA | -17.6% | $1,375,000 |
| 4 | San Diego, CA | -15.8% | $800,000 |
| 5 (tie) | Sacramento, CA | -17.0% | $575,000 |
| 5 (tie) | Denver, CO | -12.2% | $570,000 |
| 7 | Phoenix, AZ | -14.5% | $455,900 |
| 8 | Oakland, CA | -20.7% | $910,000 |
| 9 | North Port, FL | -11.1% | $450,000 |
| 10 | Tacoma, WA | -12.8% | $543,000 |
Eight out of the top 10 cities are on the West Coast. According to Redfin, Seattle, San Jose, San Diego, Sacramento, Denver, and Oakland are among the 15 most expensive housing markets. Las Vegas, San Diego, Sacramento, Phoenix, and North Port are on Redfin's list of the 10 most popular migration destinations, where more people look to move to than leave.
Even though homes are more expensive than they were before the pandemic, the prices of homes are beginning to fall due to slowing demand and more supply. This may be good news for buyers, but may be a double-edged sword. The housing market is friendlier to only those who can afford to buy a home. Despite the decrease in prices in some of these markets, it is still unaffordable for many home buyers.
Prepare for the costs of homeownership
A home is the most expensive purchase most people will ever make in their lives. There are also other expenses of homeownership that many people don't consider when purchasing a home. Mortgage rates have more than doubled since the beginning of the year, equating to more than a $1,000 increase for a typical monthly mortgage payment compared to earlier this year. Make sure you take into account insurance, property taxes, and maintenance fees before you pull the trigger on buying a home. While in the short term, prices will be impacted by interest rates, buying a home may be a great investment over the long haul.
Our Research Expert
David S. Chang, ChFC®, CLU® is an award-winning entrepreneur and financial planner with over two decades of experience in the personal finance space. He is a graduate of West Point and a Lieutenant Colonel in the Army National Guard. He has an MBA from the UCLA Anderson School of Management.
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