53% of U.S. Homes Lost Value This Year — 27 Places Where It’s the Worst

Could this be a good omen for homebuyers waiting for housing prices to drop? Or is the latest market trend a mere blip?

More than half of American homes have declined in value over the past year, marking the highest share in over a decade, according to new research from Zillow.

As of October, 53% of U.S. homes have lost value compared to a year ago, up sharply from just 14% last year. This represents the largest share of homes declining since April 2012, when the housing market was bottoming out after the Great Recession.

That sounds grim, but the overall market isn’t so bleak, as Treh Manhertz, senior economic researcher at Zillow, points out:

“Homeowners may feel rattled when they see their Zestimate drop, and it’s more common in today’s cooler market environment than in recent years. But relatively few are selling at a loss.”

The typical home has gained 67% in value since it was last sold, which, on average, was about eight and a half years ago. And only 4.1% of homes are currently worth less than what their owners paid for them, which is lower than pre-pandemic levels.

But the widespread nature of recent declines marks a significant shift — even if temporary — in the housing market.

Where values have fallen most

The steepest declines have hit the West and South particularly hard. Here are the metros where the largest share of homes lost value year over year, according to Zillow:

1. Denver, Colorado: 91% of homes lost value, with an average decline of 9.7% from peak
2. Austin, Texas: 90%, down an average of 20.5% from peak
3. Sacramento, California: 88%, down 8.7% from peak
4. Phoenix, Arizona: 87%, down 9% from peak
5. Dallas, Texas: 87%, down 11% from peak
6. San Antonio, Texas: 86%, down 13.1% from peak
7. Tampa, Florida: 85%, down 12% from peak
8. Orlando, Florida: 85%, down 8.3% from peak
9. San Francisco, California: 83%, down 14.8% from peak
10. Jacksonville, Florida: 83%, down 10.7% from peak
11. Las Vegas, Nevada: 81%, down 6.8% from peak
12. Portland, Oregon: 81%, down 8.2% from peak
13. Houston, Texas: 80%, down 9.5% from peak
14. Los Angeles, California: 79%, down 7.5% from peak
15. Seattle, Washington: 78%, down 9.5% from peak
16. San Diego, California: 78%, down 8.2% from peak
17. San Jose, California: 78%, down 10.3% from peak
18. Miami, Florida: 76%, down 11% from peak
19. Riverside, California: 74%, down 6.5% from peak
20. Atlanta, Georgia: 70%, down 8.6% from peak
21. Raleigh, North Carolina: 68%, down 6.7% from peak
22. Memphis, Tennessee: 68%, down 9.5% from peak
23. Nashville, Tennessee: 66%, down 7.7% from peak
24. Oklahoma City, Oklahoma: 65%, down 7.7% from peak
25. Charlotte, North Carolina: 57%, down 7.1% from peak
26. Minneapolis, Minnesota: 55%, down 6.6% from peak
27. New Orleans, Louisiana: 54%, down 15.9% from peak

The market’s cooldown reflects higher mortgage rates that have pushed monthly payments beyond many buyers’ budgets.

Still, most homeowners aren’t being forced to sell at a discount. Just 3.4% of new listings are priced below their previous sale price.

It’s also worth noting that any loss in a home’s value isn’t realized until that home is sold, something that many homeowners likely realize, as Zillow notes:

“In areas where substantial home value declines were more common, homes with losses were less likely to be listed. This suggests that sellers are trying to sell into strength and are otherwise able to wait for a stronger market.”

Sources

Zillow press release; Zillow report