Professionals say buyers in some markets are already getting – or may soon get – relief in the form of lower house prices. Already, over the past four to eight weeks, experts have noticed downward price pressure in previously strong and higher-priced markets. (Find out the lowest mortgage rates you can get right now here.) Seattle,” says Chris Stroud, co-founder and head of research at HouseCanary. It is a national, technology-driven brokerage firm that provides analysis for residential real estate.
All of the cities above saw a very rapid decline in their average closing prices in July and August, as buyers no longer have to engage in bidding wars or bid above asking to be competitive . “Average closing prices have largely stabilized in these markets for the most part over the past several weeks, now that the out-of-system excesses have been eliminated,” Stroud said.
Markets with the highest share of price cuts in Realtor.com’s July data cluster primarily in the Sun Belt and include Las Vegas, Phoenix, Austin, Sacramento, Denver, Portland, Dallas-Fort Worth, Nashville, Tampa and San Diego.
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Where will we see future house price declines?
Those same markets could see further declines, says George Ratio, chief economist at Realtor.com. “As we look to the next few months of rebalancing, we can expect these markets to feel increased pressure on list prices as seasonal trends take deeper root and waves of buyer traffic from of the peak of summer.”
For their part, a team of Goldman Sachs strategists said western metro areas are likely to experience a price correction, and this is “especially true in markets with lower levels of housing affordability, such as Seattle. , San Diego and Los Angeles.”
In the long term, whether prices fall will depend, in part, on where inventories are rising rapidly and excessively in conjunction with pent-up demand due to interest rates, experts say. “As we enter the period of rising prices, the majority of markets have seen record inventories. This environment, says Stroud, has so far prevented significant price declines in many parts of the country.
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Markets that have seen a particularly large influx of foreigners — places like Boise, Denver and Salt Lake City — may be more vulnerable to falling prices as the shift to remote working largely ends, says Kate Wood , home expert at NerdWallet. “It’s a double whammy for home sellers, as the influx of the wealthy with nothing dries up and many locals are now catered for. With house prices continuing to rise, these markets are still a long way off. to be buyer-friendly, but sellers the bidding wars and zero-emergency bids that have spread over the past couple of years,” says Wood.
As housing markets decline in the wake of rising mortgage rates, prices and inflation, some of these markets are finding they have an increasing amount of leftover inventory and not enough buyers, Ratio says. “For owners who are motivated to sell, the answer is increasingly old-fashioned: price cuts. Even as median list prices continue to rise – the result of homeowners’ property prices based on months of market data – inventory is starting to build and buyer traffic is decreasing putting pressure on prices,” explains Ratio.
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