A cool wind is blowing through housing markets on the West Coast, ending a boom in cities that were red-hot for years.
Recently, real-estate brokerage Redfin analyzed data in the 100 most populous U.S. metropolitan areas from February to August of this year and identified the markets that are cooling fastest based on several criteria, including:
- Price drops
- Pending sales
- Sale-to-list ratio
- Speed of home sales
Most — but not all — of the cities in the top 10 are on the western side of the country. In a summary of the findings, Redfin chief economist Daryl Fairweather says:
“These are all places where homebuyers are feeling the sting of rising home prices, higher mortgage rates and inflation very sharply. They’re slowing down partly because so many people have been priced out and partly because last year’s record-low rates made them unsustainably hot.”
Fairweather adds that the cooling trend is reducing competition in these cities and giving more negotiating power to any home shopper who can still afford to buy despite surging mortgage rates.
Following are the cities where housing markets are cooling fastest.
10. Tacoma, Washington
As we have reported, more than half of sellers in this market recently lowered their asking price. That places Tacoma among the “10 Housing Markets With the Most Sellers Dropping Prices.”
9. North Port, Florida
A cooling housing market in North Port is great news for those planning to retire soon. The city on the state’s Gulf Coast is part of the North Port-Sarasota-Bradenton metropolitan area, which is well represented among “The 25 Best Cities to Retire in Florida.”
8. Oakland, California
Oakland has enjoyed the Bay Area’s strong employment growth in recent years, and the city ranks among the most LGBTQ-friendly metros in the country. But like many places in the U.S. West, housing is now cooling after years of torrid price gains.
How frosty are things getting in the desert? Phoenix is now among the “15 Markets With the Most Home Sales Getting Canceled.”
5. Denver (tie)
Denver has been among the most popular cities to move to in recent years, and that caused local housing prices to surge. But things are coming back to earth in the Mile High City.
5. Sacramento, California (tie)
Difficult as it might be to believe, Sacramento is among the “15 Cities Where Home Prices Are Still Below Their Pre-Great Recession Peak.” And with the market cooling fast, it appears that record high set more than a decade ago will be safe for a while.
4. San Diego
Now that the San Diego housing market is settling down, owning a home is not the gold mine it was recently. In fact, homeowners in San Diego are now said to be losing equity.
3. San Jose, California
San Jose is No. 1 on the list of “15 Cities With the Largest Gender Homeownership Gap.” But with the market frenzy now subsiding, perhaps this is the time when the numbers begin to even out.
2. Las Vegas
In early August, we reported that Las Vegas was among the “10 Housing Markets That Are Most at Risk of a Downturn.” It appears that prediction might be coming to pass.
As we recently reported, residents have been fleeing Seattle and other big cities in search of better prospects elsewhere. Perhaps that is helping to reduce some of the demand for housing and bringing the market back into balance.