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Home prices falling in two-thirds of U.S. metro areas

Home prices falling in two-thirds of U.S. metro areas

”Survey says” looks at various rankings and scorecards judging geographic locations while noting these grades are best seen as a mix of artful interpretation and data. Buzz: Home prices declined in two-thirds of U.S. metro areas this summer with the priciest markets suffering the most depreciation. Almost inexplicably, Los Angeles – the nation’s sixth-priciest market…

”Survey says” looks at various rankings and scorecards judging geographic locations while noting these grades are best seen as a mix of artful interpretation and data.

Buzz: Home prices declined in two-thirds of U.S. metro areas this summer with the priciest markets suffering the most depreciation. Almost inexplicably, Los Angeles – the nation’s sixth-priciest market – had the biggest price gain in the July-to-September quarter.

Source: My trusty spreadsheet reviewed the National Association of Realtors’ quarterly report on the median selling price of existing, single-family homes in 185 metropolitan areas in the July to September period.

Topline

Rising mortgages finally caught up to what many U.S. buyers would pay after a springtime price? peak.

Price declines between the spring and summer quarters were found in 125 metro areas – that’s 68% of the markets tracked – with a median loss of 3.4%.

A metro market’s median price was a huge factor in the difference between the summer’s winners and losers

In the 55 metros across the nation with median prices above $400,000, 46 (or 84%) saw declines.

In the 76 metros with median prices between $250,000 and $400,000, 53 (or 70%) had price declines.

And in the 54 metros with medians below $250,000, 26 (or 58%) saw prices fall.

Remember, the 30-year mortgage rate averaged 5.6% this summer vs. 5.3% in the spring and 2.9% in summer 2021. That’s a 28% loss of buying power for a borrower over 12 months.

Details

Los Angeles County had the No. 1 largest summertime gain in the nation, up 8.2% to $893,200.

How odd was that? It was the only metro in the list of 20 biggest summer gains with a median above $400,000.

At the other end of the price-change spectrum, three of the summer’s 10 biggest drops came from California. I’ll note that all but one of these 10 largest dips came in metros with pricing above the nationwide $398,500 median …

The No. 1 loser nationwide was San Francisco, down 16.1% to $1.3 million. Then came …

Naples, Florida.: Down 12.2% to $746,600.

Austin, Texas: Down 11.7% to $541,600.

Boulder, Colorado.: Down 11.4% to $826,900.

San Jose: Down 11.2% to $1.68 million.

Seattle: Down 9.5% to $741,300.

Fort Myers, Florida.: Down 8.7% to $420,000.

Spokane, Washington: Down 7.8% to $422,500.

Ann Arbor, Michigan: Down 7.7% to $377,200.

Orange County: Down 7.7% to $1.1 million.

Bottom line

This summer was the first step back to price reality as many of the hottest metro areas for housing are now retreating the fastest.

Consider the frequency of summertime losses when the 185 metros were ranked by their pandemic-era price gains from 2019 to 2022’s spring quarter. And let’s mention that in this sour summer, the Realtors’ nationwide median fell 3% after gaining 50% since 2019.

First, look at the 71 metros across the nation with pandemic-era appreciation above 50%. There were 56 with summertime price declines. That’s 79%.

In the 58 metros with gains between 50% and 40%, 40 had summer dips or 69%.

And in the 56 metros with gains below 40%, 29 had summer dips or 52%.

California thinking

The No. 1 summertime gain in Los Angeles was certainly a price outlier with its jump most likely the result of statistical quirks.

How else can you explain the huge rise in LA when the other seven California metros in the study all had summertime price dips that ranked in the top third of the 185 metros?

Not mentioned above were …

San Diego: Down 6.8% in the summer quarter to $900,000.

Sacramento: Down 6.1% to $535,000.

Fresno: Down 3.4% to $410,000.

Inland Empire: Down 3.1% to $567,000.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

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