Housing Market 2024: Home Prices Are Plummeting in 10 Formerly Overpriced Housing Markets
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Measured against the normal metrics, the U.S. is in the middle of a really weird housing market right now. Existing-home sales in 2023 fell 19% from the prior year to their lowest level in nearly three decades, according to the National Association of Realtors. Normally, slow sales lead to lower prices. Yet, as The Wall Street Journal reported, a lack of inventory pushed home prices to record highs last year and made home purchases “prohibitively expensive” for many prospective buyers.
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Those high prices could remain in 2024. Nick Ron, founder and CEO of House Buyers of America, expects average home prices in the U.S. to rise around 3 to 4% this year.
“But at some point in 2024, I see a slowdown in price growth,” Ron wrote in email comments shared with GOBankingRates. “The slowdown will be due to a combination of factors such as rising interest rates, an increase in the supply of homes, a decrease in demand and affordability challenges for buyers. That said, I’m not anticipating a drop in prices nationwide. Rising construction costs and a slowing economy as a result of prolonged high interest rates will also impact the housing market in 2024.”
Nationally, home prices in February rose 0.3% year-over-year to a median price of $415,500, according to Realtor.com. But there are places where home prices are falling — and they’re scattered across different regions of the country.
“A lot of the [housing] inventory that’s coming onto the market is in a more affordable price tier,” Realtor.com Chief Economist Danielle Hale said in a press release. “When you have more affordable listings coming onto the market, it’s also going to push down the overall price.”
The number of homes for sale increased in all but two of top markets where prices are falling. As Realtor.com noted, when there are more options for buyers to choose from, prices tend to moderate.
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To come up with its findings, the Realtor.com economics team compared median list prices in February 2024 with February of 2023 in the 50 largest metropolitan areas. One thing they found was that several traditionally affordable Midwestern markets saw prices fall due to an increase in the number of smaller, cheaper homes going up for sale. While that doesn’t necessarily mean that prices on comparable homes fell in those areas, it did help “drag down” the median list prices in those markets, which means buyers have a better chance of finding an affordable home.
Meanwhile, prices have also fallen in pricey West Coast markets such as California’s Silicon Valley.
“Those areas are very closely tied to the technology industry, and tech has been on a bit of a roller coaster over the last couple of years,” Hale said.
Prices fell sharply in those metro areas during the Covid-19 pandemic as workers began working remotely and moving to cheaper parts of the country.
“We’re at a point in time where your experience in the real estate market depends on where you are,” Hale said. “It’s more local now than it has been at other points of time.”
Here are 10 markets that have seen a dip in prices this year.
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Portland, Oregon
February median home list price: $600,000
Median list price change year over year: -1.2%
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San Francisco, California
February median home list price: $989,000
Median list price change year over year: -1.3%
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San Antonio, Texas
February median home list price: $335,000
Median list price change year over year: -1.5%
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Raleigh, North Carolina
February median home list price: $440,000
Median list price change year over year: -2.2%
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San Jose, California
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Denver, Colorado
February median home list price: $610,000
Median list price year over year: -3.6%
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Kansas City, Missouri
February median home list price: $421,000
Median list price change year over year: -4.9%
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Cincinnati, Ohio
February median home list price: $337,000
Median list price change year over year: -6.4%
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Oklahoma City, Oklahoma
February median home list price: $323,000
Median list price change year over year: -7.4%
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Miami, Florida
February median home list price: $550,000
Median list price change year over year: -8.2%
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This article originally appeared on GOBankingRates.com: Housing Market 2024: Home Prices Are Plummeting in 10 Formerly Overpriced Housing Markets
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