Mortgage News - Declining House Prices In Six Cities

Declining House Prices In Six Cities

Mortgage News July 6, 2023

In 2023, people hoped for housing prices to drop and make it easier to enter the market. However, prices are still rising in many areas due to economic uncertainty and low inventory. Interestingly, six cities are experiencing significant price declines, defying the national trend. What makes these cities different?

1) Austin, Texas

Following its peak in 2021, the housing market in Austin is experiencing a cooling effect. Recent listings are witnessing significant price reductions, with over 25% of homes on sale reducing their prices to attract potential buyers.

The demand has diminished in various aspects, particularly for individuals from costly cities like San Francisco who seek favorable deals. Austin’s elevated housing prices deter many buyers, especially during a period of high interest rates, leading to adjustments in listing prices.

2) Phoenix, Arizona

Phoenix is experiencing a downturn in its volatile real estate market. Goldman Sachs forecasts a 25% decline in home values, primarily due to the inflated prices at present.

In February 2023, nearly a quarter of the homes listed reduced their prices.

3) Seattle, Washington

Inflation, rising rates, and decreased demand have caused a notable drop in Seattle’s housing market. Despite median home prices still being high at around $800,000, there has been a significant reduction.

About 21% of recently listed houses have experienced price cuts, indicating a sense of urgency among sellers.

Additionally, tech companies like Microsoft and Amazon have implemented broad employee layoffs, further impacting Seattle’s housing market.

4) St. Augustine, Florida

Properties are experiencing extended time on the market, prompting sellers to lower prices in an attempt to attract potential buyers. Over 28% of listings have seen price reductions, and homes are taking nearly twice as long to sell compared to the previous year.

5) Las Vegas, Nevada

With more than 22% of active listings experiencing price reductions, homes in Las Vegas have an average time on the market of over two months.

Sellers are under significant pressure to decrease prices to avoid the concern of their homes being unsold.

6) Huntsville, Alabama

Similar to the other cities, Huntsville is also affected by high inflation and mortgage rates. However, unlike the others, home prices have actually increased compared to the previous year. The price reductions in Huntsville seem to be mainly driven by the necessity to adjust to the reduced purchasing power of the average homebuyer.

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