Home sellers are slashing prices in these 13 cities, and there’s new evidence that houses will get even cheaper in early 2024
- Home prices in the United States remained unchanged in October compared to 2022, though they may fall in early 2024.
- According to Realtor.com, homeowners are lowering their asking prices at a faster rate.
- Here are 13 cities where home prices are falling dramatically.
Despite historically high mortgage rates, home values have held up this year, but a new report from Realtor.com suggests that prices may fall in the coming months.
According to a November 2 press release from Realtor.com, US houses cost $425,000 in October, the same as they did a year ago. Even as mortgage rates rose to a 23-year high, the firm reported flat price growth. Higher borrowing costs may have dampened demand, but it’s possible that homebuyers were concerned that mortgage rates would rise even further and wanted to buy before that happened.
“While record-high mortgage rates are deterring many would-be buyers, decreases in both inventory and time homes spend on the market indicate that some buyers are moving quickly to lock in rates before they can go any higher,” said Danielle Hale, Realtor.com‘s chief economist, in a report statement.
Realtor.com discovered that inventory fell 2% from October 2022 to keep property prices stable. Hale noted that this was the fourth consecutive month that listings fell from the previous year, and that the number of homes for sale is down 39% since October 2019.
“Listing prices continue to be buoyed by scarce inventory, and while new home sales increased in September, construction activity isn’t enough to fully bridge the low inventory gap,” the authors of the report said.
According to Realtor.com, houses are most difficult to find in the West and Northeast. Listings in those regions fell 24.7% and 10.4% from last October, respectively, compared to a 4.8% drop in the Midwest and a 3.3% increase in the South. In two-thirds of the 50 largest US metropolitan areas, there were fewer homes on the market than last year.
Home price declines may tip the market in favor of buyers.
Although scarcity gives sellers a competitive advantage in most markets, their stranglehold on buyers may be coming to an end.
According to Realtor.com, homeowners are lowering their asking prices at an alarming rate. According to the listing site, the proportion of properties that have had their prices reduced has steadily risen month over month, reaching 18.9% in October. While this is down from 21.5% last fall, it is significantly higher than the pre-pandemic figure of 17.4%.
“While home prices stayed flat, the share of price reductions, while down year over year, continued to grow on a monthly basis, indicating that home prices could potentially soften in the coming months,” according to the report.
It’s worth noting that those reductions haven’t yet resulted in widespread home price drops. Only five of the 50 largest US real estate markets saw outright price drops beginning in 2022: San Antonio, Texas; San Jose, California; Memphis, Tennessee; Dallas, Texas; and Miami, Florida are among the cities represented.
13 cities where sellers are lowering their prices
While listing prices are falling across the country, the South and Midwest are particularly affected. According to Realtor.com, thirteen of the fifty largest US metro areas had a higher rate of homes with price reductions than last October, with the majority located in those two regions.
These 13 cities are listed below, along with the median home price, year-over-year growth in median home prices nominally and per square foot, the share of homes with lower prices, and the growth in the share of homes with lower prices.
1. St. Louis, Missouri
Median home price: $277,000
Median home price growth: 0.4%
Median home price per square foot growth: 2.5%
Price reduced share: 20.8%
Price reduced share growth: 4.2 percentage points
Source: Realtor.com
2. Oklahoma City, Oklahoma
Median home price: $335,000
Median home price growth: 4.6%
Median home price per square foot growth: 1.3%
Price reduced share: 23.6%
Price reduced share growth: 3.4 percentage points
Source: Realtor.com
3. Memphis, Tennessee
Median home price: $319,000
Median home price growth: -0.5%
Median home price per square foot growth: 2.2%
Price reduced share: 23.3%
Price reduced share growth: 3 percentage points
Source: Realtor.com
4. Milwaukee, Wisconsin
Median home price: $340,000
Median home price growth: 3.1%
Median home price per square foot growth: 4.6%
Price reduced share: 21.6%
Price reduced share growth: 2.8 percentage points
Source: Realtor.com
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5. Indianapolis, Indiana
Median home price: $320,000
Median home price growth: 6.7%
Median home price per square foot growth: 5.3%
Price reduced share: 28.7%
Price reduced share growth: 2.8 percentage points
Source: Realtor.com
6. Cincinnati, Ohio
Median home price: $356,000
Median home price growth: 9.7%
Median home price per square foot growth: 9.1%
Price reduced share: 17.5%
Price reduced share growth: 1.4 percentage points
Source: Realtor.com
7. San Antonio, Texas
Median home price: $347,000
Median home price growth: -2.2%
Median home price per square foot growth: 0%
Price reduced share: 28.3%
Price reduced share growth: 1.3 percentage points
Source: Realtor.com
8. Virginia Beach, Virginia
Median home price: $374,000
Median home price growth: 4%
Median home price per square foot growth: 6.9%
Price reduced share: 21.4%
Price reduced share growth: 1 percentage point
Source: Realtor.com
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9. Kansas City, Missouri
Median home price: $412,000
Median home price growth: 6%
Median home price per square foot growth: 3.7%
Price reduced share: 19.4%
Price reduced share growth: 1 percentage point
Source: Realtor.com
10. Orlando, Florida
Median home price: $450,000
Median home price growth: 1.1%
Median home price per square foot growth: 2.1%
Price reduced share: 22.5%
Price reduced share growth: 0.6 percentage points
Source: Realtor.com
11. Baltimore, Maryland
Median home price: $367,000
Median home price growth: 8.1%
Median home price per square foot growth: 5.5%
Price reduced share: 18.5%
Price reduced share growth: 0.2 percentage points
Source: Realtor.com
12. Miami, Florida
Median home price: $599,000
Median home price growth: -0.1%
Median home price per square foot growth: 5.2%
Price reduced share: 16.7%
Price reduced share growth: 0.1 percentage point
Source: Realtor.com
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13. Columbus, Ohio
Median home price: $367,000
Median home price growth: 7.9%
Median home price per square foot growth: 7.6%
Price reduced share: 24.9%
Price reduced share growth: 0.1 percentage point
Source: Realtor.com
